Loan Cover Can Protect Key Assets

By Simon Lance Burgess

Brokers continue to expand the options and benefits available through payment protection insurance (PPI) products, including loan cover. Brokers have long had a stronger reputation than high street banks and large lenders, when it comes to offering PPI products. They continue to look for ways to enhance the appeal of the covers as more Brits are aware of the benefits of PPI and the availability of lower cost premium products and focused service from brokers.

Many brokers now offer payment protection insurance products that provide the same premiums to people of all ages. This is a huge advantage to people adversely affected by age with other income protection plans or work related health insurance products. Additionally, some specialist brokers offer unique discounts, including joint insurance plans, and discounts for unique occupations or other customized applicant traits.

Loan cover plans typically provide up to 100 per cent insurance for monthly debt, as well as up to 25 per cent additional funds to cover monthly expenses. There are other limits that apply, however. Most providers limit total protection to 1500 pounds, or 75 per cent monthly payments based on standard monthly income. The actual limit is the lower of these two amounts.

Many Brits remain unprotected against job loss due to involuntary redundancy, prolonged illness, and accident. Some rely on savings to cover short-term financial needs. Others make the mistake of thinking the State will provide support. It generally does not provide enough for the average person to continue living the lifestyle they have become accustomed to. Not only does loan insurance cover these events, it also usually provides a death benefit payable to survivors, and assistance for hospitalisation expenses and carer services.

Loan protection is not designed for long-term protection. Other types of insurance products cover these needs. Its advantages are very uniquely designed for short-term reasons. Payment periods for the coverage usually range from one to two years. Premiums are just from a few pounds per month per ฃ100 worth of cover. Banks and lenders generally offer more expensive premiums and use questionable selling techniques to push the products on consumers. Brokers often have covers less than half the premium cost of the larger institutions. Their benefits also are better, as is their support and service. Consumers need to understand the importance of hassle free claims service and support and look to more respected brokers, especially give the less expensive premium costs.

Loan insurance is a necessity for budget-conscious employees who rely on income to meet their monthly debt and expense obligations. It is important, though, that consumers buy on their own terms and do not get drawn into feeling obligation to buy the protection from their lender or bank. Some lenders attempt to package the insurance with the loan in a portfolio fashion, trying to hide the expensive premium costs.

To get the best value from loan cover, customers need to explore the great services and products offers available through brokers. Brokers generally want the best interests of the customer to prevail and usually advocate for their well-being. This helps the insured focus on returning to health, recovering from injury, and getting back to normal employment.

Simon Burgess is Managing Director of the award-winning British Insurance, a specialist provider of loan cover.