How Do You Know If Your Loan Insurance Has Been Mis-sold?

Most of us have taken out some form of loan at some time.  This means that most of us have at least been offered loan insurance.  This is a policy to protect your payments if something happens to your income.   This seems a good idea and the policies are very popular.

However, recently it has become clear that a lot of loan insurance policies have actually been mis-sold.  In fact a lot of apparently reputable companies have been fined for bad practice in this respect.   It’s particularly tempting to mis-sell these policies as the commission is good, and most customers don’t like to say no. 

So how do you know if you have been mis-sold a loan insurance policy? And if you are thinking of taking one out, how do you recognise mis-selling?  Here are some examples of bad practice to look out for.

1. You are told that you have to have the loan insurance policy to get the loan.  This simply isn’t true.  You don’t have to have it at all, and if you do have it, it doesn’t need to be from the same provider.
2. Excessive pressure is used by a pushy sales person to bully you into taking the loan insurance.  They might suggest you are irresponsible if you don’t take it, or just make it impossible for you to leave without signing up.  This is bad sales practice and can constitute mis-selling.
3. You are sold loan insurance that is largely or totally irrelevant to your needs.  For instance, a policy that insures against being unable to repay the loan because of redundancy, is irrelevant for you if you are self-employed, retired, or in employment with a no-redundancy agreement, such as local government.
4. You are not given the opportunity to look at the small print before committing yourself to the policy.  You could find after signing up that a medical condition from which you suffer is explicitly excluded.
5. One of the most blatant examples of mis-selling: the policy is actually included in the loan without asking you, and you don’t find out until it’s too late!

If you have already taken out loan insurance and any of these apply to you, you could qualify for compensation.  Contact your seller or talk to a broker to find out what to do.  If you are likely to purchase a policy in the near future, be forewarned and don’t let yourself be a victim.  Loan insurance can be a valuable product that can give you peace of mind and come to your rescue when things get difficult.  It’s sad that a few people chasing commissions have given it a bad name!

Loan Payment Insurance - Pros and Cons

When you take out any kind of loan or credit agreement, you are almost certain to be offered loan insurance.  This is a policy that is supposed to protect you in case anything happens to prevent you making repayments on your loan.  You can have one whether it’s a mortgage, a bank loan, a credit arrangement for buying a car, a store card, or any other kind of credit. 

Loan insurance is very popular and thousands of policies are sold every year.  So why do so many people buy them? 

The person selling you one of these policies will almost certainly mention “peace of mind”, and this is certainly an important reason for buying a policy.  Obviously if you’re taking on a major financial commitment, the thought of being unable to meet the payments would be a nightmare.  It could mean the bailiffs seizing your belongings, a seriously impaired credit rating, or at the very worst losing your home.  So the idea is that, with loan payment insurance, this is no longer something you have to worry about.

In addition, of course, most of us like to feel we are being prudent and thorough.  We all like to think we have taken every possible precaution against things going wrong.  If you refused to take out loan payment insurance, you might well feel guilty about failing to protect yourself and your family. 

So taking out loan payment insurance can be a good idea.  If you did find yourself made redundant, or unable to work because of an accident, this would be a highly stressful situation.  Knowing that your loan payments could continue would greatly reduce the stress.

However, there are also some downsides to loan payment insurance, so you need to consider these before you decide.

• A loan payment insurance policy that is linked to the loan itself will be “one size fits all”.  It wouldn’t be tailored to your actual situation so it might not be suitable for you.

• A loan payment insurance policy only protects against very specific circumstances.  If you buy a policy thinking it will cover you whatever happens, you could be in for a nasty shock.  For instance, it could claim to cover you against “illness”, but in the small print there could be a list of conditions that are not covered, including some quite common ones.  The small print also usually contains a list of exclusions, some of which might apply to you – for instance, those in casual or seasonal employment.  Sadly, the people selling the policies don’t often encourage you to read the small print before buying.

• A policy added to the loan can add significantly to the cost of the loan.  You could potentially find yourself paying out considerably more each month, without receiving any real benefit.

A loan payment insurance policy may well be very worthwhile for you.  But if you are thinking of taking one out, don’t take anything for granted.  Read the small print carefully and find out if the policy is suitable for you. You will find that a loan insurance policy that is independent of the loan itself is much more flexible. If not, talk to a broker and find one that is.

Why buy loan insurance?

Why should you buy loan insurance?

If you apply for a personal loan, hire purchase or finance agreement you are more than likely to be offered insurance to cover the loan repayments. This loan insurance will cover you against accident, sickness and unemployment but may also include death or critical illness.

The loan insurance policies offered by finance and loan companies are very expensive as you are a captive market. Very few people who apply for a loan will bother to see if the insurance cover is available at a cheaper price elsewhere. The loan company want you to have the cover as the earn a nice commission for each loan policy sold.

Buying loan insurance does make sense. You are protecting the personal loan payments in case you are unable to work. However, it makes even more sense to spend some time researching loan insurance to see what independent policies are available. Invariably, these will be much cheaper than the policies offered with the loan or finance package.

We offer loan insurance from British Insurance Limited who provide good quality insurance cover at reasonable prices. For more information please visit our loan insurance page http://www.enhancedwealth.co.uk/loaninsurance.htm

Loan Insurance Why do You Need It?

Almost every borrower would be well advised to avail themselves of some type of loan insurance. It just makes no real sense to take on a significant level of debt and not protect yourself from the downside of becoming sick or unemployed and not being able to make your loan repayments each month. Being buried in debt, with no way to pay it off, can ruin your life, it is just not worth taking the risk.

Loan insurance is not expensive, and it really needs to be seen as an utter necessity by any person who is taking on any level of debt. Nobody can be sure what the future holds for them, you never know if you will hit a bump at the next turn, it just makes perfect sense to make sure you have protected yourself by taking out a loan insurance policy. The government is becoming more and more concerned over the increasing level of default debt in the UK, and are demanding that lenders offer well priced and effective loan insurance products to their borrowers. This means that with a little bit of research, you should be able to find a fantastic deal on loan insurance, buying you peace of mind in the process.

What does Loan Insurance Cover?

The best known and most standardised form of loan insurance is the ASU, this is an insurance product designed to provide the following cover:

• Accident – If you are unlucky enough to fall foul of a serious accident, which sees you unable to make your monthly loan repayments, then the insurance policy will either make the loan repayment in full, or cover your payments until your period of disability comes to an end
• Sickness – Illness can be a major cause of debt problems, a sickness policy will ensure that your loan repayments are kept even if you are too sick to work
• Unemployment – Losing your job is a stressful experience, made doubly so by any debt you may have, a loan insurance policy makes sure that your repayments are covered if you are unemployed

This is a very simple description of the major components of a loan insurance policy. It should be noted that providers will often offer policies that can consists of one or more of these features, for example an AS policy would only cover accident and sickness and would be taken up by a person who already has some form of unemployment cover.

Over the last several years, we have begun to see insurance providers offer a life type product as part of the ASU package, this new type of product, the LASU adds life cover to the original ASU, this ensures that the loan is paid in full on the advent of your death, along with providing other features of a life insurance policy.

Enhanced Wealth offer loan insurance from British Insurance. Visit the loan insurance page here http://www.enhancedwealth.co.uk/asu/loanprotect/index.htm

Loan Insurance

Personal debt is constantly on the rise in the UK with more and more people falling behind on their loan repayments.  This leaves them with monthly accumulating debt, failing to repay instalments on a loan can also affect a person’s credit rating which will affect their future chances of obtaining mortgages and other types of loans.  On top of these financial problems, failing to repay a loan for whatever reason can cause personal problems, distress and even depression.  Failing to repay a loan because of bad financial management is one thing, but it is highly stressful if a person is unable to repay their monthly instalments because of illness, injury or being made redundant by their employer as most of the time the person has no way of protecting against these unfortunate incidents from occurring.

There is a way a person can protect themselves financially if they lose income due to one of the above reasons, taking out loan insurance can help with the monthly repayment costs of a personal loan or mortgage.  Loan insurance policies are available from most high street lenders and specialist online companies, you can even ask for loan insurance from the same company as you have had the loan from.  Due to the competitiveness of the loan insurance market, it is important to shop around and find the best deal which will suit your needs exactly.  Loan insurance can be expensive in some cases so just because you received a low interest rate on your loan, don’t expect to get cheap loan insurance from the same lender.

Loan insurance will protect a person from the cost of their loan repayments only.  To work out how much loan insurance you require it is important to add up all of your monthly repayment costs from existing loans and quote that figure to the lender, you will then be protected against that figure if you are unable to earn a living.

If a person is unable to work, it is very unlikely that income support or job seekers allowance will add up to what they used to earn whilst working, making living, let alone loan repayments very difficult.  Nobody knows what lies around the corner and no one is invincible, but at least with loan insurance people have the piece of mind that they will not get into impossible debts due to circumstances which could not have been helped.

Personal loan insurance

When you apply for a personal loan, car loan or HP the finance company will invariably try to sell you some kind of loan insurance or loan protection policy. They want you to take the cover out because it is overpriced and they earn commission from every policy sold.

Firstly, you do not have to take out the loan insurance policy offered. Check the loan quotation and paperwork very carefully. Is it included within the monthly payment?

If you feel that protecting your loan payments is important then you could buy loan insurance separately and this is normally a much cheaper way of protecting the loan repayments.

We offer a loan payment protection policy from British Insurance which is great value for money. You can quote and buy online in just a few minutes. Our clients have saved considerable amounts of money by buying their loan insurance policy independently of the loan itself.