Loan payment protection
 

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.

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.

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??

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

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.

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