In order to take out a policy the individual must be in full time employment. Must be aged between 18-65 years of age, plus there will be other requirements. A policy would give the individual an income after a certain period. This will be set out in the terms and conditions and must be read.

Usually the waiting period will be between 30 and 90 days of being continually unable to attend work or of becoming unemployed. It is also worthwhile checking to see if the policy would be backdated to the first day. Some providers will offer this and others do not. After the commencement of the cover, it would continue to provide security by way of an income for between 12 and 24 months. In the majority of cases, this is more than enough time to get back on your feet or to find another position.

A loan protection policy with an ethical standalone provider will cost less than taking the cover alongside the borrowing with the high street lender. Even then, get several quotes because premiums do vary greatly. As does the information given before, you buy. A policy taken with the high street lender could almost double the cost of a cheap loan. High street lenders are estimated to rake in around ?4 billion in profits from sales of payment protection. Cheaper quotes are always found with independent specialist providers.

Problems began in 2005 for the sector and this led to a decline in faith in payment protection products. The Citizens Advice made a super complaint to the Office of Fair Trading and then followed an investigation. The Financial Services Authority also began their own investigation, which resulted in several well-known high street names being handed fines. While they continue to keep an eye on the sector, they also referred the sector to the Competition Commission. They are currently conducting an in-depth review and some changes have already been seen.

One of the biggest changes is set to launch in 2008 when the Financial Services Authority introduce comparison tables. The tables will show how much a policy would cost and make the consumer aware that there are exclusions. They will also help when it comes to choosing the type of policy. Loan protection is just one form of protection that can be taken. There is also mortgage and income protection. These protect the same but for different reasons. The tables will ask the consumer a series of questions, which they will answer. This will then lead them to the correct policy for their needs.

Loan protection has earned itself a bad name but there is also much good to be considered. When taken out after reading the information a specialist will provide the cover can give peace of mind. The income it provides would allow the policyholder the security needed to concentrate on recovering from an accident or illness. It would also give them time needed to find another job in the case of redundancy.