Loan protection insurance is not the easiest product to buy and in the past this had led to many buying cover that has been useless. However all this is set to change with the introduction of comparison tables in March 2008. It is hoped the tables - which are being implemented by the Financial Services Authority - will lead to a better deal for the consumer as they will be able to determine how much the cover will cost along with being aware there are exclusions.



Having loan cover means that should you become unable to work due to accident, illness or unexpected redundancy, your loan repayments will continue to be repaid. It provides you with a much needed income between the 30th and 90th day after the event, with some policies back dating your claim to day one. The policy would then carry on paying out a monthly tax free sum for between 12 and 24 months which gives you time to recover or find alternative employment without the added stress of having to struggle to find the money.

There are exclusions which are to found in all policies and it is these which determine whether an individual would be able to make a claim. Those who are retired, suffer an ongoing illness are retired, self-employed or who work part time would probably not benefit. While these are the ones most frequently found there can be others based on the provider. This means that checking the terms and conditions are essential.

While there are terms and conditions these can vary. For example suffering a pre-existing medical condition will vary depending on the provider. Some might exclude one illness while another might allow you to take out a policy; this is why you have to check each individual policy thoroughly. While the tables will provide information for those wishing to take out loan protection insurance they will not be limited to just this. They will also cover the rest of the family of payment protection which includes mortgage and income cover. These too are valuable products and it is imperative to take the cover that is most suitable for your circumstances.

The terms and conditions can be hard to find, but it is imperative that you read them before you buy. Along with getting the key facts and information needed to decide if a policy is suitable you will also get the cheapest premiums. In fact buying your policy from a standalone provider can save you around 80% in comparison to the dearest quotes.

Learning as much as you can about loan payment protection insurance goes a long way to making sure you buy a policy that will work. The importance of this was highlighted in 2005 when the regulatory body the Office of Fair Trading received a super complaint regarding the mis-selling of protection insurance from the Citizens Advice.

Some of the main concerns were the high premiums charged for loan protection insurance and the lack of information regarding the exclusions. While some changed have been seen many more still need to be made as in 2007 it was revealed that the Financial Services Authority have investigated over 4,000 cases of mis-selling. The key to getting the right policy is to research your options thoroughly and don't be coerced in to buying the first loan insurance you are offered.