We all like to protect ourselves and our families in every way we can and when it comes to financial matters this should be our utmost concern, especially when taking out a loan. While you may have no worries now and be able to meet the monthly loan repayments comfortably while you are working, have you considered the possibility that should you come out of work for any reason, how you would carry on servicing your monthly commitments? There is an insurance specifically designed for this, it is called loan cover or loan payment protection insurance, and it will pay out a monthly sum if you find yourself out of work due to long term sickness, an accident or unforeseen unemployment.
When taken out correctly the loan cover will give you and your family the peace of mind that if the unexpected should happen - and it could in a world where the phrase ?a job for life? no longer exists - you would at least have an income enabling you to carry on paying your loan repayments each month. However, where you choose to take the insurance from will depend on the cost of your premium for the loan cover and also the quality of the product. The dearest loan cover premiums you will undoubtedly be quoted for are with the high street lenders and banks. But, shop around and go with an independent specialist provider, and you should pay less.
The difference between the two can be quite astonishing and the amount you could save could be in the thousands over the term of the loan, so it really is worthwhile shopping around for cover rather than accepting the cover offered by your loan provider.
The quality of the product can also differ and recently the high street lenders and banks have been the target of investigations into the sector by the Financial Services Authority and the Office of Fair Trading after it was found there has been wide mis-selling of payment protection. However it is mostly the big high street names that have been found guilty of this and of course this is another excellent reason why you should go independently. So if you want the peace of mind that loan cover can provide then shop around for your cover ? it's the only way to make sure you get a quality product while getting the cheapest premiums.
Redundancy cover can be taken out to protect against the fact that you might find yourself out of work due to being made redundant. While the cover just guards against involuntary redundancy, you can also take out additional cover to insure your income against coming out of work due to accident, sickness and unemployment together.
Redundancy cover can be taken out in the form of mortgage payment protection, income protection or loan payment protection insurance and it can give great peace of mind and security by providing you with a tax free monthly income that ensures you could continue to pay your essential outgoings.
Mortgage payment protection insurance (MPPI) will give you a monthly tax free income so that you can carry on paying your mortgage repayments each month you continued to be out of work, this means that you won't get behind on your mortgage repayments and risk repossession.
If you have loan repayments to make each month then loan payment protection will give you the money with which to carry on meting your loan repayments. Finally, income protection insurance would give you a replacement income up to pre-agreed amount each month which will let you pay your essential outgoings and continue living your current lifestyle.
All redundancy policies will begin to payout after you have been out of work for a certain amount of time which can be anything from the 31st day to the 90th day of being out of work continually. Once the policy had kicked in it would then continue to give you an income for up to 12 months and with some providers for up to 24 months.
However there are exclusions in all redundancy cover policies which could mean you would be ineligible to make a claim and the most common include only being in part time work, if you are retired or if you suffer from a pre-existing medical condition at the time of taking out the cover.
Stick with a standalone provider for your redundancy policy as not only can the specialist save you money on your policy but also make sure that you get the correct advice and the key facts that you need to ensure that a policy is suitable for your circumstances.
Simon Burgess has sinced written about articles on various topics from Mortgage Insurance, Finances and Income Protection Insurance. Simon Burgess is Managing Director of the award-winning British Insurance, a specialist provider of low cost ?> loan cover , mort. Simon Burgess's top article generates over 74000 views. to your Favourites.