Loan protection insurance
Protect your debt repayments – compare loan protection insurance with ActiveQuote[1]
What is loan protection insurance?
It’s a form of income protection that can cover your debt repayments if you're unable to work.
It’s sometimes known as loan payment protection insurance and policies can cover you for accident and sickness or unemployment. You can also find policies that cover you for all these eventualities.
How does it work?
If you find yourself unable to work, a loan protection insurance policy will pay out monthly benefits directly to you.
Whereas payment protection insurance (PPI) will typically be attached to one debt, you can use loan protection to pay off any debt you choose, whether it’s your mortgage or credit card repayments.
You can protect up to 70% of your gross annual income and payouts will normally be tax free. However, this will mean higher premiums, so only choose what you can comfortably afford.
Do I need the cover?
It completely depends on your financial situation. If you would struggle to make your minimum loan repayments without your salary, you may want to consider it.
How to find cheap loan protection insurance
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Compare your options
Don’t just choose the first policy that comes along. Shop around to find one that suits your budget
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Check your policy
You may be in a position where you can change your cover or cancel it completely
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Choose the right cover
It may be tempting to choose the highest amount you can but it’s not always necessary and you’ll end up paying higher monthly premiums
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Delay your payouts
You may see premiums reduce if you increase your deferred period by a few months
Frequently asked questions
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What happens to my loan protection policy when I pay off my loan?
When you compare loan protection policies with us, you’ll choose how long you’d like the cover to run for, after which time your policy will end.
If you pay the loan off before this time, get in touch with your provider and it’ll be able to advise you on what to do next. -
Can I get loan insurance if I’m self-employed?
Some loan insurance policies exclude those who are self-employed as well as those who are on short-term contracts.
Check the terms and conditions before you buy to make sure you’re covered. -
Does loan protection insurance have a cooling-off period?
All types of insurance have a cooling-off period of 14 days.
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Will my loan protection premium increase when I’m older?
There may be restrictions on a person’s age in the small print of your policy. Double check to see whether you’ll still be covered as you get older, and how this will affect your premiums.
Other types of income protection
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