The Loan insurance is taken out mostly to safeguard against the fact that if by chance you were to lose your income then your loan repayments would still be able to be paid each month without worrying about from where you would be able to find the money to pay the loan repayment.
When bought with keeping your circumstances in mind it could give you a replacement income each month which was determined at the outset when you got the quote for the cover and this would be determined by the sum of money you payout each month for your loan repayments. Once you had been out of work for a pre-defined period of time which is usually between 31 and 90 days then you would receive a tax free lump sum payout for up to 12 months and with some providers for up to 24 months. You do have to be aware that there are lot of factors involved which can make you ineligible to claim against a policy and you have to make sure that you read the small print and the key facts of a policy before taking it out. Some of the most common facts include if you are self-employed, if you are of a retirement age, if you only work in a part time position or if you have an ongoing illness at the time of...
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