Title: 
Loan Insurance Can Give Peace Of Mind

Word Count:
504

Summary:
The Loan insurance is taken out mostly  to safeguard against the fact that if by chance you were to lose your income then your loan repayments would still be able to be paid each month without worrying about from where you would be able to find the money to pay the loan repayment.

When bought with keeping your circumstances in mind it could give you a replacement income each month which was determined at the outset when you got the quote for the cover and this would be det...


Keywords:
Income Protection Insurance, Mortgage Protection Insurance, MPPI, PPI


Article Body:
The Loan insurance is taken out mostly  to safeguard against the fact that if by chance you were to lose your income then your loan repayments would still be able to be paid each month without worrying about from where you would be able to find the money to pay the loan repayment.

When bought with keeping your circumstances in mind it could give you a replacement income each month which was determined at the outset when you got the quote for the cover and this would be determined by the sum of money you payout each month for your loan repayments. Once you had been out of work for a pre-defined period of time which is usually between 31 and 90 days then you would receive a tax free lump sum payout for up to 12 months and with some providers for up to 24 months. You do have to be aware that there are lot of factors involved which can make you ineligible to claim against a policy and you have to make sure that you read the small print and the key facts of a policy before taking it out. Some of the most common facts include if you are self-employed, if you are of a retirement age, if you only work in a part time position or if you have an ongoing illness at the time of taking out the policy.

Loan insurance in the past has caused a great deal of controversy when the sector was investigated in 2005 by the Financial Services Authority after the Office of Fair Trading received a super complaint from the Citizens Advice which revealed mis-selling was widespread. Many high street lenders were fined and the sector was then referred to the Competition Commission for a review which is expected to reach conclusion in early 2009. While some changes for the better have already arose the Financial Services Authority have revealed that very little progress has been made when it comes to the selling techniques, many firms are still not giving enough information and making the product easy to understand at the time the policy is taken out.
 
The specialist standalone provider will always offer the consumer the information needed so that they can ensure they have a policy that is suitable for their circumstances by giving them the key facts of the policy along with the exclusions. Loan insurance can give great peace of mind and security of an income but only if you are eligible to claim the loan insurance.

One change for the better which will occur in March 2008 is the introduction of comparison tables which will allow the consumer to answer questions which will then lead to them knowing which type of policy is suitable for their needs and how much they will pay along with outlining the exclusions. Until this happens the specialist provider is your best option and will always be able to offer you the cheapest premiums for the monthly premium along with excellent advice on all aspects of a loan insurance policy.