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Loan InsuranceYour lender may insist that you take out an insurance policy alongside any loan that you arrange. The insurance policy will cover the repayment of the loan in the event of your inability to make the repayments either through death or loss of earnings (but it will not let you just walk away from the debt). Loan insurance is not cheap and may add a substantial amount to the cost of your loan. It is easily possible that an otherwise attractive interest rate deal may actually cost you more on a monthly basis than a loan charging a higher rate because of the insurance charges. Some lenders insist on loan insurance, others are prepared to be flexible.
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