Shop Around For Loan Insurance
When it comes to taking out finance such as loans and mortgages, most of us want to enjoy the peace of mind that comes with protecting our borrowing so that we are covered in the event that something unexpected happens, such as illness, redundancy, or even death. However, the cost of insuring your finances can be very high, and this is why experts now advise borrowers to shop around in order to find the best deal when it comes to insuring their borrowing.
Some experts are concerned that a large number of consumers feel obliged to take out insurance through the company that they are borrowing with, with some assuming that they have to take out cover with that particular lender. Some lenders are also trying to tempt consumers into taking out insurance with them by offering special deals and rates on financial products on the condition that the borrower agrees to take out their particular insurance protection package.
There are some great deals available on insurance these days, and consumers could save a fortune each year by shopping around and taking the time to compare the different options and packages available. Experts have also stated that if a lender is offering a conditional special offer, consumers should weigh up the savings that they could make as a result of the special offer against the amount that they will be paying by having to take out the lender’s own insurance. In many cases the lender is able to recoup the money lost through the special offer – and more besides – through the amount charged on the insurance cover that the consumer is then forced to take out.
Although it is advisable to ensure that you have some form of protective insurance to protect yourself, particularly with longer term finance, borrowers should always take a look at the insurance packages on offer rather than committing to the one offered by the lender.
Alisdair Milton
21st November 2006
More Information:
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If you're taking out a sizeable loan, the idea of payment protection may sound like a good idea. Programs such as these protect buyers in the event that they are unable to make payments on the loan due to events such as layoffs or medical emergencies.
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Almost every time you apply for a loan or other form of credit, you are asked if you would like to purchase credit insurance. It my even be automatically added to your contract without you noticing.
