Loan insurance can be a valuable lifeline if the worst thing should happen and you cannot 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 meet the monthly repayments on a loan, credit card, or another 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 something that is excluded, you won’t get paid and will have wasted the premiums and have the financial worry of coping. Unfortunately, most people buy a policy alongside their loan or credit card from there and do not bother to read the small print, believing that they have purchased a policy they are eligible to claim on.
To get the right policy for you, you must shop around and go with an independent specialist who knows the sector’s ins and outs and so can give you the benefit of their knowledge. Along with this, the standalone provider can 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 then 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 favor of making huge profits, even if this means giving the poor consumer 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.