Loan payment protection insurance is sold under different names including loan cover, loan protection, loan insurance and ASU insurance. Whatever the name, it does the same thing and that is it will cover your loan repayments up to a predetermined amount if you should lose your income by being out of work through accident, long term sickness or unemployment.
However, loan payment protection insurance isn’t suitable for everyone as there are exclusions which could stop you from making a claim which many who bought their cover either knowingly or unknowingly found they were mis-sold their policy after taking it alongside their loan from the high street lender.
If you want the safety net that loan payment protection insurance can give then it is essential that you purchase the cover wisely and understand the many exclusions which can stop you from claming on the policy. It is also essential that you realise that premiums for the cover do vary widely from provider to provider and this can end up adding thousands onto the cost of the loan and turn what was a cheap loan into a very expensive one after the cost of the protection is added onto it.
A specialist standalone provider will typically be able to provide the cheapest loan payment protection insurance premiums for a quality product and your peace of mind. Historically, the high street banks and lenders charge way over the odds for loan payment protection insurance, that is why it is important that you shop around for the cover.
It can give you valuable peace of mind and stop you from getting into serious debt problems if you didn’t have the money to meet your monthly loan repayments. It does however have to be given careful consideration that it does meet your circumstances, if you are self-employed, retired or suffer from a pre-existing medical condition that would keep you off work then a loan payment protection insurance policy probably wouldn’t be in your best interests.