Loan Insurance Guide

Payment protection insurance

Most lenders offer loan insurance schemes to help you out in the event of ill health, unemployment etc. The terms of cover will vary greatly so check the small print.

Think of some eventualities that may happen to you and ask the lender whether their insurance would cover you.

Make a note of the date you called and who you spoke to (just in case they deny what you were told, which sadly seems an increasingly common practice).

Make sure you're not already covered for this through another insurance policy.

Some lenders will give you lower rates if you take out this type of insurance with them. But, added to the repayments, it's highly unlikely it'll be cheaper than not taking it out at all.

Shop around for loan insurance as you're bound to find something cheaper if it's not "bundled" with the loan.

On the whole these policies are seen as a waste of money. Usually the small print makes them irrelevant when you come to claim. "Heart attack? No Sir that's not one of the serious illnesses on our list. Didn't you read the terms? Oh the print was too small? Sorry..."

However we have found a good loan insurance broker. British Insurance won the BEST INSURANCE BROKER Broker Award 2006 for their quality of product and service.