Loan payment coverage is payment protection insurance that can cover your mortgage, loan, or credit card. Basically, they offer short-term protection for a worker (usually between 12 and 24 months) for a worker who has been absent from work due to involuntary layoff, illness or injury.
Loan protection insurance is intended to cover monthly loan repayments, and some even offer additional monthly assistance. For a long time, some street lenders have had the practice of bundling the loan with insurance. It has been this practice that has been harshly criticized by the OFT after considerable pressure from consumer groups. A Citizens Advice complaint led to an investigation that found that the elderly, unemployed and people with pre-existing conditions were routinely sold policies on which they could not claim.
The FSA also investigated and this resulted in massive fines imposed on the biggest offenders. There are ethical insurers on the market that offer this valuable protection, at competitive rates and in appropriate circumstances.
However, for those who have already purchased a loan protection policy, there is a remedy. If you believe that you have been advised to purchase insurance that was not suitable for you, it is possible to file a claim. You can make such a claim yourself, but it is often found that it is easier and less complicated to hire a dedicated professional to file the claim for you.
A claims professional will be regulated by the Ministry of Justice and will have experience in recovering everything to which they are entitled, and will not only take a figure that the creditor can offer them.
It is estimated that up to one-third of all policies sold in the last five years may have been under-sold in some way.