UK loan protection insurance is taken out to ensure that if you lose your income through accident, sickness or unemployment you would have money to be able to repay you monthly loan repayments each month. Cover usually kicks in after 30 days of being out of work and continues for up to 12 months and with some providers for up to 24 months but it isn’t suitable for everyone due to the exclusions in all policies.
However, UK loan protection insurance has attracted some bad publicity.
An investigation into the way loan protection insurance was sold in the UK began in 2005 after a super complaint by the Citizens Advice to the Office of Fair Trading. Following this the Financial Services Authority fined several high street names after it was revealed that there had been wide spread mis-selling in the payment protection sector of which loan protection insurance UK policies are one part
The mis-selling of policies included charging extortionate premiums for cover; not making the consumer aware that cover had been included in a policy; and not giving the essential information needed to ensure the consumer could decide if a policy was suitable for their needs. When it came to buying the protection online alongside a loan then many sneaky lenders used pre-ticked boxes which meant that if the consumer didn’t want the cover then they had to choose to un-tick the box which of course led to confusion. Thanks to the Financial Services Authority, many lenders have now agreed to change the way cover is sold alongside loans online.
When it comes to making sure you get the best deal on your UK loan protection insurance then it is essential that you put it into the hands of a standalone provider who can usually offer you the best cover while helping you to make savings on the cost of the insurance.