The Truth Behind Protection Insurance: You and Your Loan
Background:
If you are planning on applying for a loan in the near future, chances are that you will be offered a type of insurance intended to protect your payments in times of emergency. Especially when dealing with big loans, this may seem like a very good idea. However, let's observe this situation more carefully before we make our decision.
The Cons:
Because the lending business is becoming more competitive, lenders must find a way to turn a profit, despite the declining interest rates. They do so by offering tags to the loan -- one being payment protection insurance. The offer, although appealing, is often just as expensive as the interest you are required to pay on your loan.
The Pros(?):
As the technological revolution continues, people fear the possibility of losing their jobs, and therefore are forced to believe that protection insurance is necessary. What we must understand, in contrast, is that once an emergency presents itself, it is very tough to get the policy to pay its dividends on your behalf. Because of this, it is very important that, before we accept such an offer, we carefully read the policy so that we understand exactly what it does and does not cover. Remember, most companies use any excuse, no matter how petty or remote it may seem, to avoid payment.
A Word of Advice:
Keep in mind that the first offer you receive is not always the best. Take your time, explore all options from many different lenders, and decide which policy best suits your needs. It is always okay to say no.
Greg Pashby is a senior writer and contributor for Bad Credit Lender.
If you are planning on applying for a loan in the near future, chances are that you will be offered a type of insurance intended to protect your payments in times of emergency. Especially when dealing with big loans, this may seem like a very good idea. However, let's observe this situation more carefully before we make our decision.
The Cons:
Because the lending business is becoming more competitive, lenders must find a way to turn a profit, despite the declining interest rates. They do so by offering tags to the loan -- one being payment protection insurance. The offer, although appealing, is often just as expensive as the interest you are required to pay on your loan.
The Pros(?):
As the technological revolution continues, people fear the possibility of losing their jobs, and therefore are forced to believe that protection insurance is necessary. What we must understand, in contrast, is that once an emergency presents itself, it is very tough to get the policy to pay its dividends on your behalf. Because of this, it is very important that, before we accept such an offer, we carefully read the policy so that we understand exactly what it does and does not cover. Remember, most companies use any excuse, no matter how petty or remote it may seem, to avoid payment.
A Word of Advice:
Keep in mind that the first offer you receive is not always the best. Take your time, explore all options from many different lenders, and decide which policy best suits your needs. It is always okay to say no.
Greg Pashby is a senior writer and contributor for Bad Credit Lender.
posted by cordell at
2:21 PM
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