Are You Paying Too Much For Your Loan Insurance?
Keywords: insurance, car, life, travel, pet, caravan, cheap insurance, UK, compare, quote, home, buildings, contents
When you take out a loan, it is likely that you will be offered loan insurance to protect your payments should you be unable to keep up with them due to illness or unemployment. However, many of the loan insurance policies on offer cover you for very little and are extremely expensive. If you want to find out what you should be paying for insurance and what to avoid then this article can help you to decide.
What is loan insurance?
Loan insurance is often known as payment protection insurance or PPI. This type of insurance covers you if you cannot make your loan payments because of an accident, illness or involuntary unemployment.
How much does it cost?
The price of this type of insurance can vary greatly, but is usually added as an extra to your payments each month. Although the payment figure might look small, if you add it to the total loan amount and then add interest the number can seem much more.
Hidden costs
Although a loan might seem cheap, when payment protection is added the loan price can increase significantly. For instance, the amount you pay back on a 5000 loan over 5 years can increase by over 1,500 when loan insurance is added. Often, insurance is added without you knowing about it, which means you are paying for something you didn’t even ask for.
The benefits
Despite its high cost, there are some benefits to insurance. It can give you the peace of mind that if something should happen to you then your payments are covered for up to a year. This means that you won’t be in financial difficulty or risk default if you are ill or injured. If this sort of security is important to you then loan insurance is probably a good idea.
Lack of cover
Although it can give you peace of mind that you will be covered, loan insurance has extremely limited coverage. For example, if you are self employed it is unlikely that the unemployment clauses will cover you unless your business has ceased trading. Before getting any insurance you should check that you are covered for the things that are important to you, otherwise the policy is not worthwhile.
Alternatives
There are some alternatives to insurance that are usually cheaper. Firstly, you can usually get the same sort of loan/boorowing insurance cover independently from your loan provider. The price of this insurance is usually much lower than the price offered by your insurance company. Also, some of the clauses of the this type of insurance may already be covered under other insurance policies that you have. Loan insurance can be worthwhile, but unless you are covered and can get the insurance for a good price then it is usually not worth having. However, if you shop around and know exactly what you need to be covered for, you can find insurance that will cover you in the event that you cannot keep up with your loan repayments.
Peter Kenny is a writer for The Thrifty Scot, please visit us at www.thriftyscot.co.uk and www.thriftyscot.co.uk
Previous Articles Highlighter:
Buy Foreclosed Homes- Be An Informed Buyer (1)
What buyers do these days is think from their hearts instead of their heads. Buyers are suggested to purchase a foreclosed home only if it is economical. This means that buyers have to conduct a thorough research for knowing which properties are being sold way below the market value, properties that have maximum valuable, properties that can be resold at a profit.
Consumers Determined To Buy First Home (2)
While there are now many flexible, competitive mortgage products on the market which can help people make that step up, first-time buyers have to be careful not to over-extend themselves, especially as there may be further rate rises to come." Meanwhile, some 79 per cent of consumers believe that the base rate is set to rise over the course of the next 12 months.
Foreclosed Home- Discover The Truth About Foreclosed Homes (3)
As mentioned before, consult a reputable title agent or attorney before buying a home. Many people harbor wrong notions that foreclosed homes are basically shabby homes in rundown neighborhoods.
Foreclosed Home Listing- An Insight Into Foreclosed Home Listings (4)
Your dreams can come true with a foreclosure home listing. A foreclosure home listing gives you various home options to choose, at a variety of prices. Foreclosure homes are ones that were taken from the possession of the buyer by a particular financing company who first mortgaged the loan on it.
Foreclosed Homes List- An Important Tool (5)
Sell Your Home Fast? As Is Now will buy your house in 24 hours if approved and you get cash in your pocket. We help you get rid of your home fast for any reason including to Stop Home Foreclosures : www.asisnow.com
Understanding Your Annual Percentage Rate (APR) (6)
Because all lenders follow the same rules to ensure the accuracy of the rate, it provides consumers with a good basis for comparing the cost of loans, including mortgage plans.
Buying Home Owners Insurance Online (7)
For the most part, homeowners insurance will be provided as a packaged policy and will help to cover the home owner's legal responsibilities because of property damage and/or personal injury.
Do You Know Why You Want To Become A Trader Online? (8)
-Why do want to build a passive income stream? -Do you want to be able to afford the finer things that life has to offer or do you feel more comfortable living paycheck to paycheck.
When To Refinance Your Home Mortgage (9)
You can compare quotes and decide whether you would like to accept of the refinance home mortgage quotes offered. There are a lot of lenders that would love to assist your with your refinance home mortgage, but you need to find the one that will best meet your needs.
Understanding Virtual Banking (10)
And most of the services can be done online and completed by phone or by one time paper work. Although internet banking is a welcome option that makes the lives of customers easier and improves business efficiency, it faces a negative aspect in terms of the chances of fraud.
What Is A Mortgage Refinance? (11)
If you remain cognizant of what interest rates are doing while in the refinancing process you will be able to reach your financial goals much easier. Another area where a refinance may help your financial situation is if you are having trouble meeting your monthly payment or you need to free up some cash for home improvements and the like.
The Personal Financial Budget Is The Door To Financial Freedom (12)
The question you need to ask yourself is which one are you and which one do you want to be? If you want to be the person with the secure financial future then you need to take charge of your money with a cash flow plan.
Your Credit Report And Credit Score (13)
Three major credit bureaus namely Experian, Equifax and Transunion maintain your report. Information from banks, your credit card company and any other party with whom you owe something are being collected by credit bureaus and compiled for your credit report.
How To Pick A Good Home Owner Insurance Company (14)
One final thing that is a necessity is a insurance provider that will give you the freedom to quickly and easily change your coverage as your needs change through the years.
The Importance Of Having Umbrella Insurance (15)
Things such as personal injury protection are covered. This includes false arrest, false imprisonment, malicious prosecution, defamation, invasion of privacy, wrongful entry, or eviction. Also, some umbrella policies provide coverage for you if you are sued in connection with any charitable boards or organizations of which you are a member.
Is Your Identity Stolen? - What You Should Do (16)
Contact them by phone at 1-877-IDTHEFT (438-4338); TTY: 1-866-653- 4261, or by mail at: Identity Theft Clearinghouse Federal Trade Commission 600 Pennsylvania Avenue, NW, Washington, DC, 20580 You can also visit the FTC website at www.consumer.gov/idtheft.
Business Finance Resource Availability Issues For Telecommunications Companies (17)
Thermo Credit LLC provides asset based solutions and works with partner companies to offer loans, lines of credit, and capital investment. We are rich in telecom funding experience. We can offer insight beyond strictly business financing resources.
Eight Ways To Save Money On Gas (18)
Do some research to determine if you could save money in the long term by switching to a model that gets more miles to the gallon. It may also be possible for you to make your current vehicle more fuel efficient, and you may even be able to get tax credits for doing so.
Considering Health Savings Accounts (19)
Choosing an HSA could significantly reduce your share of premiums, and some employers may opt to fund all or part of the HSA, much like a 401(k)-style match. Individual Insurance - You can find a list of health insurance companies offering HSA-eligible plans in Texas on line.
7 Cash Flow Steps To A Healthy Budget (20)
It can make your cash flow plan much easier and with the added features like retirement and tax planning it can give you a solid financial future. By using these 7 cash flow steps you can begin your budget quickly and easily.
Newer Articles Highlighter:
Banking Alternatives: Do You Need A Bank? (1)
There are many banks that operate solely online, and there are a lot of benefits to this sort of bank. Although you might not be able to get money as easily as you could with a normal bank, you can transfer funds and pay bills much more efficiently.
Britons Should Not 'Sit Back' For Energy Price Cuts (2)
Switching to an online price plan was also said to allow people to access the most competitive deals from providers. However, the price comparison website claimed that such offers "seem to be the best kept secret in the energy market", with only one in eight customers opting for such a deal.
Fixed Rate Loans 'Offer Peace Of Mind' (3)
Moneyfacts analyst Lisa Taylor suggested that such proposals to offer such long-term products could help borrowers to maintain the level of their secured loan payments. However, she added that if the Bank of England's monetary policy committee (MPC) decides to lower the base rate of interest in the long-run then homeowners could be trapped with unnecessarily high mortgage costs.
Low Income Families 'Need Access To Cheap Loans' (4)
In the newspaper Mr Blunkett and Ms Green stated: "This could really turn things around - facilitating independence and offering a ladder away from home credit and most importantly, loan sharks, towards proper financial advice and guidance, opening a bank account and supporting a savings habit that enables and empowers, rather than spending money they don't really have on sky high interest payments.
Floods And Home Insurance (5)
You can have both types of cover combined into one policy through one insurer or insure your buildings and contents separately though two different insurers. Cover will normally protect building and contents against the major risks of fire, storm damage, flood damage and theft, policies may also cover many additional risks as well.
No Credit Is Worse Than Bad Credit (6)
One way to eliminate this problem and build credit is to acquire a collateral bank loan and once this is paid back you automatically have a credit line. This is part of do it yourself credit repair.
Looking For Love Can Issue 'Shock' To Financial Situation (7)
Some 23 per cent of those questioned claimed that time spent in higher education was a "major factor" in their current difficulties in meeting debts incurred on credit cards and personal loans.
Young Buyers Ready 'To Take On Huge Debt' (8)
Meanwhile, those who are 55 and above are the least likely to want to take out a mortgage, with only seven per cent of people in this age group having such plans.
House Price Growth 'Falls' (9)
Abbi Rouse writes for Loan-Arrangers .co.uk where visitors can compare loans online. Then apply for the best rate secured loans and bad credit loans available. Visit our site news.loan-arrangers.co.uk
All About CDs (Certificate Of Deposits) (10)
The money in the CD is held until it 'matures', at which point the customer can withdraw it without bringing about any fees (which are applied if he or she withdraws before the date of maturation).
Q And A About Credit And Credit Bureaus (11)
The Asani Wells financial group consists of ex-Bureau employees and agency solicitors who have combined years of knowledge of the credit score system into this easy to read downloadable EBOOK.
Credit Repair Companies Are Just Not Worth It (12)
Most if not all states require such firms to practice with a credit services license which legally enables them to request for and access personal files for the consumer. Some states even go as far as requiring all credit repair firms to maintain a $250,000 surety bond/liability for 2 years after doing business in the state.
Scholarships: The Top 10 Strangest Ways To Pay For College (13)
Any high school senior-skateboarder with a 2.5 GPA and serious plans on attending college can apply for one of four scholarships, ranging from $1,000 to $5,000 dollars each. 2.
How To Open A New Credit File (14)
Before you decide which way to go you must know exactly what you are trying to do.Personal information data include birthdate, social security number and address. Variations can be made easily to the address, but other variations including social security number and birthdate require you to be very keen to the inner workings of credit and how credit bureaus work.
One In Three 'Lack Credit File Knowledge' (15)
Meanwhile, about one in five respondents did not even know that such a report is ever held in their name. The findings also indicated that only a quarter of consumers have checked their credit history over the last five years, with about half of these said to have done so once during this period.
Don't Let Banks Charge You An ARM Or A Leg (16)
You can enjoy the benefits of a much lower interest rate, lower closing costs and a lower house payment for the time your in the home. Remember that long term fixed rate mortgages favor the banks.
Refinance Medical Equipment To Offset Reductions In Medicare Reimbursements (17)
For that matter, even buying new equipment for longer amortizations might make sense. If the medical equipment is likely to withstand an onslaught of technical advances, a refinancing could be the ticket to helping offset the specter of Medicare payment deductions.
Low Interest Based Loans On The Net (18)
Ask as many questions as it takes for you to be comfortable with the company you have chosen. Make sure that you read all of the small print, because once you have signed the papers, it is a legal and binding contract.
Are There Really Ways To Make Money Online? (19)
Behind all the MLM, Pyramids and other schemes lay a group of people who were making large amounts of money online. And these guys weren't companies -- they were privateers.
A 100 Percent Mortgage Can Be Your Ticket To A New Home (20)
Despite the higher interest rate and the shorter term of the second mortgage the total payment of both loans will be about the same or less than the standard 100 percent mortgage because there is no PMI with the 80/20 loan.
Permalink to Are You Paying Too Much For Your Loan Insurance?