The last few months have seen an increase in sales of loan insurance policies. As the economy declines, unemployment is rising and jobs are no longer safe. People quite rightly are looking to protect their incomes, their loans and their mortgages.
Loan insurance cover comprises of three elements:
- accident
- sickness
- unemployment
Loan insurance policies are generically accident, sickness and unemployment (ASU) policies. They are similar in basic makeup to income protection, unemployment insurance and mortgage payment protection insurance policies.
Loan policies are designed to cover the monthly loan repayments should you suffer an accident, sickness or unemployment. People are most worried about redundancy as it can be difficult to find new employment. Should unemployment strike the cheap loan insurance policy will pay your loan payments for up to 12 months, giving you time to get back on your feet.