Loan protection has been called many names including a ?rip-off?. The negative slurs stemmed from an investigation by the Financial Services Authority in 2006 when it was found there was wide spread mis-selling of payment protection insurance (PPI) products. Many consumers were not being told how much the cover would cost in total, weren't given any information about the exclusions which are in all policies and were being charged high premiums for inadequate cover or cover they couldn't claim against.

When bought incorrectly, the cover can indeed be nothing more than an expensive waste of money particularly if it is taken out alongside the loan with the lender at the time of securing the loan. However, going with an independent specialist can save you hundreds of pounds.

Loan payment protection can when taken out with your circumstances in mind begin to give you an income which is tax free from between the 31st day and the 90th that you are out of work if you have suffered from an accident, an illness or if you have been made unemployed. It would then continue to give you security for between 12 and 24 months depending on the policy. The terms and conditions are always set out in the key facts along with the exclusions which can vary but there are some that are the same in all policies such as if you are in only in part time work, if you are self-employed, suffering from a pre-existing medical condition or of retirement age.

The biggest problems associated with the payment protection sector has been a lack of knowledge regarding the products at the time of taking out the policy with very little if any information being given by the lender as to how much the total amount of cover will cost, the exclusions in a policy and that the consumer has the option of shopping around for the cover to get the cheapest premiums. The majority of loan cover bought is sold alongside the loan at the time of taking it out and it is these firms that received fines from the Financial Services Authority during the investigation. The problem with buying loan protection from the high street lender is that they have little experience in the product and selling it as opposed to the standalone specialist in payment protection who know the product inside out and pass their expertise onto the consumer.

The exclusions should be made clear at the time of buying the policy and presented in an easy to understand format instead of the technical jargon that is associated with policies. Fortunately the majority of standalone specialists will give you access to the information needed because they don't put the huge profits that the high street lender puts ahead of what's in the consumers best interest. Always make good use of the expertise that the specialist can provide so that you will not be let down in your time of need but instead have the security that loan protection should give.