Information on loan payment protection insurance

Whether you are in the process of getting quotes or have just taken out a tenant loan, it is highly probable that you have been offered loan payment protection.

What is Loan Payment Protection?

Quite simply, this is a form of insurance designed to meet loan repayments should the borrower fall seriously ill and is unable to work for a long period, or unemployment unexpectedly occurs. As with any type of insurance policy, there is of course eligibility criteria that the applicant must meet, and the usual policy exclusions.

Unfortunately secured and unsecured loan payment protection policies have hit the headlines in recent years often for the wrong reasons. In a few cases, it has not always been made clear that this type of policy is optional at the time the loan is taken out and not mandatory. In addition, some sections of the working population such as the self employed are not always covered by some insurers policies. Another criticism levelled at some lenders and insurers has been the relative high cost of this type of loan protection.

The good news is that these issues have been highlighted and the regulatory authorities and insurers appear to be responding by introducing best practice governing the selling of such policies in the first instance. There is also greater public awareness regarding the fact that prospective borrowers whether they are homeowners or tenants can shop around independently for payment protection insurance and get the best value for money.

For more information, consider visiting the Association of British Insurers who have produced a comprehensive buyers guide.

Please Note! YOUR HOME IS AT RISK IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR OTHER LOAN SECURED ON IT. ALL SECURED OR UNSECURED LOANS ARE SUBJECT TO STATUS. SECURED LOANS ARE SECURED ON PROPERTY.