Loan protection insurance
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Loan protection insurance, or loan payment protection insurance, is a form of Payment Protection Insurance (PPI). This type of insurance can help you protect your monthly loan payments if you become unemployed or suffer an accident or sickness.
Loan protection insurance will typically be used to protect a personal loan, car loan or car finance agreement. These finance companies will offer loan protection insurance as part of the loan as they earn commission on each policy sold. However, the premiums (and commissions) are high so shop around to save money. Loan insurance is available as a stand alone separate policy.
Policies are generally available to people between 18 and 65 who are actively working.
In the event of being unable to work, the policy will pay a monthly benefit to you for a maximum of 12 or 24 months. These loan insurance plans are General Insurance policies and as such do not accrue any positive cash value.
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