A simple question with a simple answer, any borrower is best advised to take out some form of loan protection insurance. It makes very little sense to take on debt, and leave yourself unprotected from the adverse effects of falling ill or becoming unemployed and being unable to meet your loan repayments. People have had their entire lives ruined by finding themselves drowning in debt they can no longer afford to repay.
Loan protection insurance is relatively inexpensive, and should be considered an absolute necessity by anyone undertaking a moderate to high level of debt. The future is unsure; you can never know what awaits you around the next bend, do the sensible thing and protect yourself with loan protection insurance. In recent years it the government has made increasing demands upon lenders to present their customers with cost effective and robust loan payment insurance products, shopping around can find you a great deal, and buy you complete peace of mind.
Loan Protection Insurance – Types of Cover
The standard for of loan protection insurance is sometimes known as an ASU, this form of insurance covers you for:
- Accident – Should you be unfortunate enough to suffer an accident which means you will be unable to pay your debt in full, due to dilapidating injury; your debts will be covered, either by full payment of monies owed, or for the duration of your period of invalidity
- Sickness – If you find yourself too ill to work for an extended period, and are unable to work, your policy will make your loan repayments for you
- Unemployment – For those people who find themselves out of a job, and unable to earn the income required to make loan repayments, the loan protection insurance policy will cover them
This is a basic definition of an ASU style policy; insurers will often offer policies containing only a single type of cover, or a combination of any two. For example, a AS policy would provide cover for only accident and sickness, suitable for people who already have some external form of unemployment cover.
Increasingly, insurance providers are beginning to include life cover as part of the insurance plan, which will repay the entire loan value upon the death of the insured party, alongside other life related benefits.
Obtaining Advice on Loan Protection
Making sure that you are well protected for those adverse situations is an important situation, and one that is best discussed with a qualified professional, who understand the level of cover you require and the best way to obtain it. Make sure that you understand the policy schedule in full before agreeing to the policy; again your broker will be able to answer any questions, or explain any terms that you do not understand.
Enhanced Wealth offer loan protection insurance from British Insurance.