Loan insurance can be a valuable lifeline if the worst thing should happen and you are unable to work due to involuntary unemployment, an accident or prolonged sickness. A policy will cover you for a specific amount of money and for a period of time, usually around 12 months, sometimes up to 24 months, which means that you would be able to continue to met the monthly repayments on a loan, credit card or other borrowing. However it can only be a valuable lifeline if you have purchased the policy correctly.
Policies have exclusions within them and these are usually hidden in the small print, so unless you specifically read the small print, they can go unnoticed. This could mean that if you try to claim for something that is excluded, then you simply won’t get paid and will have wasted the premiums as well as have the financial worry of how to cope. Unfortunately the majority of people buy a policy alongside their loan or credit card from their and do not bother to read the small print, believing that they have bought a policy they are eligible to claim on.
In order to get the right policy for you, then it is essential that you shop around go with an independent specialist provider who knows the ins and outs of the sector and so can give you the benefit of their knowledge. Along with this, the standalone provider is able to offer you the cheapest premiums on a policy and this usually can make a huge difference compared to the price quoted by the high street lender.
With finances often being stretched to the limit after all, this is why you take on a loan in the first place – then it is of course wise to get the essential cover for the cheapest premium possible. The high street banks have been well known for charging premiums that are way above the odds in favour of making huge profits, even if this means giving the consumer poor advice when it comes to their policy. So loan insurance can be a valuable lifeline, but only when taken out correctly, so do thoroughly research the marketplace before you buy.