Is Personal Loan Insurance Necessary?

By Author: Alisdair Cosgrove
Total Articles: 184
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If you are making payments on a loan, there are some factors you have no control of which may affect your ability to continue making the scheduled payments on time.

You may become sick or be involved in a debilitating accident that takes you out of work for an extended period of time. Your employer may have to make some unavoidable cut-backs in the amount of wages being paid and the number of employees on the payroll or perhaps you own your own business and the income from it may not be as good as it was at first and you can no longer pay any additional payments.

When our interest rates or personal expenses have risen it is extremely hard to keep up on our loan payments.

Many of us have borrowed too much and so we are at the point of being unable to make payments on any more loans.The people who have young children and those who are about to retire or are well past retirement age, may be losing sleep because they are worrying about such issues.

The reason why loan insurance is being offered is to give you some protection against falling behind in your loan payments.You cannot be denied acceptance ...
... on credit, if you decide to not take out the loan insurance, even though it will be offered each time you choose to make a purchase on credit.When you do decide to use the loan insurance, it is wise to shop around for the best rates, as they will vary from provider to provider, and you should not go with the first insurer you contact.

If you do decide to use the loan insurance you can rest a little easier knowing that if certain events not in your control occur, your loan payments will be paid by the insurance company.

A few things that could covered by loan insurance are an accident or sudden illness which will need to be handled by a loss of time on the job or a loss of income due to cutbacks in wages or employees.It is very important to be aware of the conditions and exclusions included in your loan insurance policy before you agree to the insurance coverage because there are those who pay for it without ever having any idea of the benefits or when to apply for them.

Some lenders are very quick to add loan insurance to their customer's account as a means to increase their own revenues and the consumers may have no knowledge of having agreed to this type of insurance.

No matter how impractical this seems to be, sometimes these personal insurance policies will require that you take the first job you are offered after losing your present one, without any regard to the level of pay being offered.

If you were to be allowed to search for a better paying job, it is entirely possible that you will be able to find a new job that is a more suitable match for your work experience and pay level.

You must always know exactly what you are getting and paying for when you buy insurance; understand what the coverage exclusions are and do not buy it if the policy does not have what you want.If it has been added to your account without you having given permission, you should call your creditor and have it cancelled immediately.It is not desirable to anyone to pay for an item that they did not seek to have or intend to use.
Alisdair Cosgrove loves to write about finance issues and advise on how people can save money on their personal finance outgoings and can find more of his information at the UK site Loan Empire, offering debt consolidation loans and also great information on many low rate mortgages.