Loan Protection
In the unfortunate event of an accident, illness or disability
that leaves you un able to work, or if you loose your job
and are unable to find work for a period, you may need the
assistance of loan protection to cover the repayments you
can not afford to pay. Loan insurance policies are put in
place to cover your personal loan if you find yourself unable
to work. Some loan insurance providers make it possible foe
you to vary the type of cover you hold, so you can choose
just accident and sickness, or just unemployment cover, for
example: With loan insurances the policy covers your usual
monthly repayments that you make to your lender, A good number
of loan insurance polices cease paying after a set period,
normally 12 months but benefits may carry on paying until
the loan is paid off and not just for a limited period. Claim
benefits are payable for up to a maximum of 12 months for
any separate unemployment or disability claim under this insurance.
Once you return to work you need to stay in work for another
180 days before you can claim again.
Understanding loan insurance cover
Loan insurance policies aren’t straightforward and
can be difficult to understand. They contain a whole host
of terms and conditions and exclusions. You need to read a
loan insurance policy document very carefully to be sure you
understand exactly what is covered; and more importantly what
your not covered for. The company that sells you the loan
insurance policy should explain the important cover details
and draw your attention to any significant or abnormal exclusion.
It should make sure the loan insurance policy it sells you
is suitable for your needs
It is possible for you to make a claim under this insurance
at any time during the period of insurance providing you notify
your loan protection provider as soon as reasonably possible.
However, unless you have been granted exclusion free transfer,
there is a period of 120 days immediately following the insurance
start date during which any occurrence or notification of
impending unemployment will not be insured. This is known
as the initial exclusion period and includes any period of
consultation even though unemployment may not take place until
after this period.
Claims as a result of medical problem that you have had,
or were treated for in the last year, won’t normally
be covered under a loan insurance policy. This could mean
that your claim is turned down if you are unable to work because
of an existing condition. Under the insurance codes companies
have a duty to ensure that your loan insurance policy they
sell you is suitable and matches your requirements. It is
also important that you declare anything that you think could
affect your cover.
Before you can claim for unemployment, you normally need
to have been in work full-time for at least six months. There
can be different requirements if you are on a fixed-term contract
or are self-employed. If you work part-time, you normally
need to be employed for more than 16 hours a week to be able
to qualify for cover. Always make sure that you are eligible
for cover when you take out the loan insurance policy.
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