Loan payment protection

[Viney]

I have a few loans and credit cards, like most people in the rich and prosperous land, and all of them have payment protection. My qestion is, is there anyone out there that hasnt taken the std protection out, and gone with a 3rd party, or anyone that has ditched thier companies sceme and gone with a 3rd party?

Looking at a couple of wbesites, it looks like a can save a fortune every month.

[Ceri JC]

If you can afford to do it, it's worth (unless it is very large amounts of cash you're borrowing) cutting out on this sort of insurance entirely IMO. Put the money you would normally spend on it in an ISA each month.

[Viney]

If you can afford to do it, it's worth (unless it is very large amounts of cash you're borrowing) cutting out on this sort of insurance entirely IMO. Put the money you would normally spend on it in an ISA each month.
I hear ya, but i need the extra cash, and looking at this as freeing up some money. I cant be without it, as i feel naked without it, and if, god forbid, i was made redundant etc, then i'l be up a brown smelly creek with no paddle.

[Demonz]

I had a friend that had it and used it when he lost his job.

For the cost of it personally I wouldnt bother either - as above ISA or other interest/savings account where you can use it if its needed.

[Viney]

I had a friend that had it and used it when he lost his job.

For the cost of it personally I wouldnt bother either - as above ISA or other interest/savings account where you can use it if its needed.The money that it costs, would not pay the monthly payment(s) so dont see how that would help. I need something to pay my commitements if i fell ill or redundent.

[Demonz]

I had a friend that had it and used it when he lost his job.

For the cost of it personally I wouldnt bother either - as above ISA or other interest/savings account where you can use it if its needed.The money that it costs, would not pay the monthly payment(s) so dont see how that would help. I need something to pay my commitements if i fell ill or redundent.

You'll need some specialist advice on this one Viney - and i'm not one...? Maybe call an insurance broker and check out some of their options with employment protection etc as it could be an option to cover in these events??

[timwilky]

TBH, these schemes are a complete con. Expensive insurance that in most cases only has a payout duration of 12 months or less if you are in the final year of a loan etc.

When I once tried to take out a loan of £7000 with my bank they insisted that I have insurance as a condition for the loan. I declined their offer and took out a loan elsewhere at far lower interest once I had shopped about, so their loss.

OK, if I was made redundant I would get somewhere in the reason of £45,000 far in excess of any debts I had anyway. I also get 12 months sick pay before I drop to half pay for a further 2 years, so I guess for me that these sorts of insurance policies are just expensive add ons and of no value.

[Viney]

TBH, these schemes are a complete con. Expensive insurance that in most cases only has a payout duration of 12 months or less if you are in the final year of a loan etc.

When I once tried to take out a loan of £7000 with my bank they insisted that I have insurance as a condition for the loan. I declined their offer and took out a loan elsewhere at far lower interest once I had shopped about, so their loss.

OK, if I was made redundant I would get somewhere in the reason of £45,000 far in excess of any debts I had anyway. I also get 12 months sick pay before I drop to half pay for a further 2 years, so I guess for me that these sorts of insurance policies are just expensive add ons and of no value.Hmmm, you know what mr wilky, i havent thought about things like that

[northwind]

High street banks' payment protection tends to be extortionate, and not particularily effective. Take us (HBOS). 10,000 over 5 years costs £259.14 per month with insurance- that's £15,548.40 in total not including arrangement fee.

Now, without the cover that's just £196.60 per month, £11796 exactly, saving £3750 over 5 years. If you prefer, you could pay off the £10000 over four years instead with a lower monthly fee.

Unless I miss my mark, that covers you at most for one year with disability, critical injury and redundancy. Which is absolutely rubbish, you're paying that much extra in premiums over the course of the loan. I sold those things for 4 years, and generally the only time it was a benefit was customers who we wouldn't cover anyway!

I'd always, always have recommended anyone considering this to consider full income protection instead, it's generally cheaper and better.

[Iansv]

Quit it years ago on all my stuff, saves plenty if you total it up, so long as you feel secure in your job i'd recommend

[Cronos]

Payment protection insurance is nothing but a massive rip off huge source of profits for the high street banks.

My advice would be to take out loans without insurance. Use what you save to pay off your debts more quickly. If the worst happens then that'll be the time to think about how to either a) manage payment of your debts over a short term when you're not working or b) re-negotiating your repayment terms with your debtors if you're going to be out for longer.

[Dicky Ticker]

All I can say on this topic is that when I fell ill after buying my wife a new car it was paid for all the time I was not working and all they wanted was copy doctor certs
In the final outcome they paid for 18months so all I actually paid was the deposit and the last six payments= one very cheap car
I know everybody's circumstances are different but I prefer to safe and buy for cash whether it be car,bike whatever but I was glad of the insurance in that instance

[northwind]

High street banks' payment protection tends to be extortionate, and not particularily effective. Take us (HBOS). 10,000 over 5 years costs £259.14 per month with insurance- that's £15,548.40 in total not including arrangement fee.

Now, without the cover that's just £196.60 per month, £11796 exactly, saving £3750 over 5 years. If you prefer, you could pay off the £10000 over four years instead with a lower monthly fee. But to put it differently, the bank is taking £1796 off you without cover for the loan- £5548.40 with. It triples the cost of the loan.

Unless I miss my mark, that covers you at most for one year with disability, critical injury and redundancy. Which is absolutely rubbish, you're paying that much extra in premiums over the course of the loan. I sold those things for 4 years, and generally the only time it was a benefit was customers who we wouldn't cover anyway!

I'd always, always have recommended anyone considering this to consider full income protection instead, it's generally cheaper and better. Our repayment cover is more or less industry standard, some are more expensive, not many are less

[james160987]

i looked at these for a friend, for their prices id take it out

http://www.paymentcare.co.uk/quickquote.php?action=process

[pegasus]

i have to agree with mac since my accident in january i havent been able to work but my protection policies have

1. paid my mortgage
2. paid my car
3. paid all my credit cards
4. paid me £100 per day for each day in hospital (21 days)
5. paid me a lump sum for personal injury (this is an optional extra)
6. and finally provides me with an income

i will end up going back to work after 12 months sick leave with no debt at all and a clean credit history

for me it was worth the few extra quid
hth

[northwind]

Their income protection looks pretty good- income protection is often a better deal than loan or mortgage protection, since those just cover your bills- income protection covers everything (well, usualyl up to a percentage, say 75% of your income)

[timwilky]

I had a former colleague who had income protection, it really helped him when he was made redundant. However, he had had the policy for about 10 years so it was doubtful as to whether he actually got back all the money he had paid as premiums.

[SVeeedy Gonzales]

I never take out payment protection on cards, etc.

Got critical illness and life cover, that's it.

[creamerybutter]

i have to agree with mac since my accident in january i havent been able to work but my protection policies have

1. paid my mortgage
2. paid my car
3. paid all my credit cards
4. paid me £100 per day for each day in hospital (21 days)
5. paid me a lump sum for personal injury (this is an optional extra)
6. and finally provides me with an income

i will end up going back to work after 12 months sick leave with no debt at all and a clean credit history

for me it was worth the few extra quid
hth

Paid all those debts in full? I am in the process of buying a house and none of the insurances would pay everything off unless I had a terminal illness/died they would only cover the payments for the period of time after my sick pay run out and before i went back to work.

[pegasus]

[

Paid all those debts in full? I am in the process of buying a house and none of the insurances would pay everything off unless I had a terminal illness/died they would only cover the payments for the period of time after my sick pay run out and before i went back to work.[/quote]

no not all, they have continued paying my car which is now paid for and my mortgage, i have now since sold the house, but they did pay all my credit cards completely.

no disrespect intended but i think you havent been offered the full range of packages that are available...or very possibly some of what were excellent protection policies that were available have now been pulled from the marketplace

just to emphasise that i have been off work since january and possibly will not go back to work till next year at some stage..so we are talking quite a lot of money from all these policies,
with everything combined i am pretty sure it is around the £60,000 mark for 12
months

if you are willing to pay you will get whatever service you want.

hth

[Red ones]

I have covered the mortgage and the car loan.

I don't bother with Credit Cards.


CCs are the lowest of the low priorities as far as repayment comes. The others are secured against an essential, if I can't afford the CC then thats where bargaining with the card issuer comes in to the frame. Besides I consider the protection on cards as an extension of the interest rate. If you pay 1.20% pcm interest then add another 1% loan repayment protection you are effectively paying 2.20% to service the debt. Would you take out a credit card if they said the APR was 30%?? Don't think so. Invest the 1% for the PPP off hte loan amount and reduce the loan faster.


Visit www.fool.co.uk for some sound advise. SOmewhere there are some loan and credit card repayment calculators - look for the ones that calculate on a principle called "Snowballing" the repayment then starts to look shocking and might convince you to consider self-insuring (there is a risk, however you do reduce the period of the repayment)[/url]

[Jools'SV Now]

A seperate cover-all policy is generally the most cost effective.

Individual payment protection policies on loans and cards are the profit makers for the banks. Hence them being very keen for you to take them out.

PS they cannot refuse you a loan because you choose not to take it out, otherwise it is a conditional sale and the cost should be added to to the apr. :wink:

As usual shop around.

Take into account your employers benefit (speak to your personnel dept to find out exactly what you would or wouldn't get-don't take the 'bloke in the pub's' word for it- he's generally talking ****)

If you haven't got any cover and you're off ill a long time £74 per week, statutory sick pay (i think, approx, disclaimer disclaimer) aint gonna go far.

If you've got a mortgage (taken out after Oct 1995) you get ZERO housing benefit for 9 MONTHS. good luck keeping your house!

Kinda makes you think, dunnit?

It'll never happen to you though.....cos....er.....you're Batfink, your wings are like a shield of steel!

yeah right :roll:

[Fizzy Fish]

the policies which come with the loans, etc are a real con IMO - the benefit that they deliver for the cost is pretty poor. And you also need to be careful about clauses in the small print which mean that they don't deliver when you need to use them, e.g. Etienne had payment protection on a loan but when made redundant they refused to pay out because their criteria was that he had to be claiming unemployent benefit. Since he's not a British citizen he isn't eligible to do so - and they knew that this when they set up the loan & protection cover.

Income protection on the other hand means that if you can't work you have more than just your loans paid, you also have money to live on.

TBH if it's all too much of a headache to figure out yourself, if you can find half an hour to talk to a financial advisor you should find that they can fix you up with income cover tailored to your needs (e.g. taking into account the sick pay that you would get through work, etc) and end up with better cover at a lower cost. Certainly worked for us!

[Fizzy Fish]

It'll never happen to you though.....cos....er.....you're Batfink, your wings are like a shield of steel!

yeah right :roll:

especially apt given that we're all bikers here, and we all have friends who've had to take time off due to accidents...

oh, and make sure any policies which you take out cover you for riding bikes as well - some don't