Britain is a nation that enjoys a bit of credit.

Each day of year millions of pounds of debt is issued in one form or another, personal loans, hire purchase, lease purchase, contract hire, first year payment free and four years 0%; names immaterial, its all credit. Unfortunately, an intrinsic part of a credit sale, is the much more profitable insurance sale; and that can cost you a packet. 

Take the purchase of the shiny new car for example. Imagine, you are at the dealers, done the test drive, sorted out the spec, the colour, and the part exchange price on your old car.

An hour and a half at the dealers, you got the car that you wanted, feeling good, having triumphed over mans No 2(close second to a double glazing salesman) mortal enemy, getting the deal that you wanted.
At this point, you drop your guard, after all the deal is done; isn’t it?

The car salesman takes you through to a man called “the business manager”, who is actually the Finance and Insurance salesman; to talk to you about funding options.

He will talk about the various options, Personal Contract, HP, leasing, balloon payments etc, and the focus is on the affordability of the monthly cost. But you know approximately what the market is doing, because interest rates are constantly in the public domain and he knows this, so will offer something competitive, Say 5%. You think, great, I have done it again, guard dropped.

However, his job is to make some money out of you, so its time to play the joker!

Loan Protection Insurance

This insurance is designed to meet repayments if you are unable to, due to accident, sickness or redundancy. In this case it could avoid the car being repossessed and the ensuing bad credit rating, increase in the costs of all credit, inc mortgages that could follow.

For most of us, not being able to meet ones credit commitments is a real worry, he knows that and has a solution, a Loan Protection Policy.

The sales goes like this “for an extra 1.12 per day, that not even the cost of a sandwich, you loan can be protected against the consequences of not being able to pay due to accident, sickness or redundancy”.
Most people say, “oh alright”. He rings the bell, he got you.

The majority of Loan Protection Policies are sold in this way, to protect car loans, personal loans, second charge loans, loans for home improvements, conservatories; the list goes on. There are huge profits for the companies selling Loan Protection in this way as the cost is almost double that of a good quality stand alone Loan Protection Policy.

If you are going to take out a loan and want a Loan Protection Policy buy a good quality policy from an independent supplier.

Loan payment insurance will protect your loan repayments in the event of accident, sickness or unemployment. These types of policy will generally payout for up to 12 months in the event you are unable to work, hopefully giving you enough time to get back on your feet. After this period the loan payments will stop.

Loan payment insurance can be offered by the loan company or finance company. These tend to be pushed hard and you will be encouraged to apply. However, they can be of poor quality with very high premiums.

By taking out an independent Loan payment insurance you are in control. The loan insurance is separate from the loan itself so you can change the cover or even stop it whenever you wish.

Loan payment insurance is generically an accident, sickness and unemployment (ASU) policy. By its nature, Loan payment insurance will have monthly insurance premiums taken by direct debit and the policy will automaticaly renew each year until you decide otherwise.

British Insurance Limited is one of the UK’s leading providers of good quality Loan payment insurance and income protection insurance.