Loan insurance

Discussion in 'Finance, Property, Law' started by fally_highlander, Jan 25, 2008.

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  1. Having looked into my finances this month i thought do i really need to have loan insurance so i called the bank and told them about my deployment in the next 6 weeks and asking them if anything were to happen was i covered they said if it was a act of war or terrorism it was no and i asked where did that leave me if something happened and i was told put a little away a month or wait for a insurance pay out has anyone else had problems like this with the bank ?
  2. Most civvy life or disability insurance is invalid (i.e. won't pay out) if you are injured or killed as a result of terrorism or war. Hence PAX and SLI.
  3. Sorry should have said the insurance they offer with a loan if you were to lose job or accident etc
  4. Payment Protection Insurance as offered by the banks/high street lenders is currently the subject of a 'super complaint' by the FSA. This is basically due to mis-selling, 'hard' sales practices, payout exclusions in the small print, and the way the premium is paid up front rather than monthly.

    It makes up a very substantial profit for the bank and will not pay out in a number of circumstances. I can (and sometimes do) recommend it in certain circumstances.

    However I don't think I've ever sold it to HMF on a loan (mortgages are different) because (a) life cover wouldn't pay out if it was an act of war/terrorism, and I believe (may be wrong on this) that this would also apply if you were in theatre or pre-deployment training and got run over by a truck.
    (b) The critical illness cover - well, look at your age and decide if you fall into the likely category to have a heart attack or stroke.
    (c)Unemployment? Some policies are worded to say 'redundancy' so won't pay out if your actual post still exists. Plus how likely are you to need civilian unemployment cover? Even the way Gordon & Des are going, the Army isn't likely to start compulsory redundancies any time soon. If you get binned as a result of disciplinary action, guess what, the policy won't pay out. If you are MD'd following injury sustained from hostile action, guess what, no payout. MD'd for other reason you may have a chance!
    (d)Accident/Sickness preventing you from working? Will your pay change if you are downgraded or hospitalised?

    Insurance is a gamble, and the house (i.e. the bank) will always win!

    However I would have a good look at what the benefits are versus the cost and from what I have gleaned would spend the cash on a Mil Life/Injury policy instead.