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Loan Insurance Provides Your Repayments If You Lose Your Income

Jun 2, 2008
Loan insurance can provide you with the repayments of your loan or credit card borrowing if you should find yourself unable to work after becoming ill. Illness happens at anytime and sometimes it is necessary to take many weeks away from work or in some cases months. If you were to have an accident then it could also take weeks of recovery before you could go back to work. In the case of losing your job altogether you could have to attend lots of interviews before finally finding a position suited to you.

In all cases continuing paying your lender is imperative if you did not want to get into debt. If you got behind on your repayments you would at the very least suffer a bad credit rating, the worst situation could mean that you would be taken to court. If you are considering using savings as a means of income to protect your repayments, they could last a while but if you had to dip into them for months on end, they might run out. State help is also considered as a means of repaying your loan. You should not automatically assume that you would be entitled to receive benefits from the State. You need to be eligible to claim and this means you have to be eligible to claim income support.

Loan insurance will come with some terms and conditions as do all insurance type products. However the provider will give you the information needed for you to be able to determine if cover is suitable for your needs, there and then. Once you were protected by a policy it would provide you with the much needed income if you should become unemployed or incapacitated for a certain period of time.

The waiting period before cover pays if you are incapacitated or unemployed would depend on the provider. The majority of them would state that you cannot claim on the cover until between the days thirty and ninety. This means you must be out of work for the stated time consecutively then claim on that day. Some providers will backdate the benefit to the first date of your becoming unemployed or incapacitated and you should consider this when looking around for the policy. A policy will pay out for a certain period of time before expiring; depending on the provider you are able to take out a twelve month or twenty four month policy.

With loan insurance behind you to back you up you would not have to worry about juggling your loan or credit card repayments each month. You would have the luxury each month if needed of the tax-free income you insured against when taking out the cover. You are then able to concentrate of getting well and back to work; if you had become unemployed you would not be distracted and could just concentrate on finding work. Of course you should read the terms and conditions of the policy before taking it on if you were to have peace of mind.
About the Author
Simon Burgess is Managing Director of the award-winning British Insurance, a specialist provider of loan insurance.
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