Despite what the high street lenders will have you believe you do have options when it comes to loan payment protection insurance. High street lenders try to push a policy alongside the borrowing. However, this can boost up the cost of a cheap loan by almost half again. A cheaper solution is to shop around with those who specialise in payment protection.

A specialist will only deal in payment protection and as such, the products are sold with experience. High street lenders on the other hand sell a policy alongside their products with little knowledge of the product they are selling. Mis-selling of loan payment protection and related products was highlighted in 2005. The Citizens Advice brought it to the public's attention when they made a super complaint to the Office of Fair Trading. Following this, the Financial Services Authority investigated which resulted in several high street names receiving fines.

Mis-selling ranged from failing to give advice regarding exclusions that can apply to selling a policy with huge premiums attached. While the Financial Services Authority continues their investigation, the sector is also undergoing an in-depth review by the Competition Commission. Some changes for the better have already been seen in the sector and more should be in the pipeline.

Comparison tables due to be launched shortly by the FSA will make the sector more transparent. They will allow the consumer to answer question that will lead to them taking out the right cover. Loan payment protection insurance is just one of a family of protection policies. It is essential that you make sure which product is suitable for your needs. The tables will also highlight the cost of the cover and any exclusions that could reside in the policy.

Loan payment protection insurance can be an ideal way of protecting your loan and credit card repayments. If you were to fall behind on the repayments, this would lead to the individual earning himself or herself a bad credit rating. This would mean that it would be hard or impossible to get credit in the future. In the worst case, it could also mean you would have to go to court and a judge would order bailiffs to seize your possessions.

A policy would begin to provide the policyholder with a tax-free income if they were to lose their income. This could be through suffering an accident or illness or through unemployment such as redundancy. The premium is based on your age at the time of applying for cover and your repayments. There will be a waiting period before you will be able to claim and this is set out in the terms and conditions. These must be read as they can vary depending on the provider, as does the cost.

Loan payment protection insurance would provide the policyholder from between day 30 and 90. It would then continue for between 12 and 24 months. In the majority of cases, this is ample time, however you should consider how you would manage once the policy has ceased. Loan protection allows the individual the time to find another job or to recover from illness or accident without added stress.