Protection Insurance
:: Loan Protection
Insurance PR
Keep away from the bank robbers!
New research reveals that consumers can save well over £3,000
over five years on a £7,500 loan by looking beyond their
High Street loan provider for loan protection insurance.
Specialist insurance website www.protection-insurance.com,
which has come up with this staggering finding after comparing
the costs of protecting a loan via the top ten lenders (see
Editors’ Notes), also warns against the “hard sell” approach
sometimes employed by these organisations.
Simon Burgess, spokesman for the site says “Lenders encourage
their staff to sell loan protection insurance because their
profit margins on the actual loans are small. Some banks are
offering repayment terms that are only 1% to 1.5% above the
base rate and, by the time you’ve taken bad debts into consideration,
there’s not much left for them by way of a return.
“In some cases bank staff are targeted to sell this cover and
have the opportunity to earn a financial bonus from doing so.
But the downside for the consumer is that this means that they
can end up with a policy that is wildly uncompetitive and also
of inferior quality.”
Burgess offers the following advice to consumers:
*Before you sign an agreement check that loan protection insurance
has not been automatically included in the cost of the loan
*If loan protection has been included, make sure you understand
exactly what you are covered for and how much it is going to
cost
*Work out what the benefit will be if you lose your job – you
could be better off with an income protection policy than with
loan protection
*If you discover you have been mis-sold a policy, you can complain
to the company and you may potentially have a case to take to
the Financial Ombudsman Service.
Editors Notes
Protection-Insurance.com compared the cost of loan protection
insurance from the top ten lenders by sales volume on a £7,500
loan over five years with a monthly repayment of £147.33
this produces a potential saving of £3237.60 when comparing
the cost of loan protection from Protection-Insurance.com and
Bank of Scotland, the most expensive.
Lender
|
Monthly cost of loan protection
|
Total cost of loan protection
|
Potential Saving |
Abbey
|
£21.06
|
£1,263.60
|
£2,327.40 |
Alliance & Leicester
|
£27.07
|
£1,624.20
|
£1,966.80 |
| Bank of Scotland |
£59.85
|
£3,591.00
|
N/A |
Barclays
|
£41.21
|
£2,472.60
|
£1,118.40 |
Halifax
|
£35.07
|
£2,104.20
|
£1,486.80 |
HSBC
|
£38.74
|
£2,324.40
|
£1,266.60 |
Lloyds TSB
|
£30.38
|
£1,822.80
|
£1,768.20 |
Nationwide
|
£21.03
|
£1,261.80
|
£2,329.20 |
NatWest
|
£40.65
|
£2,439.00
|
£1,152.00 |
Northern Rock
|
£37.20
|
£2,232.00
|
£1,359.00 |
Protection-Insurance
|
£ 5.89
|
£220.80
|
£3,237.60 |
The average cost of loan protection from the lenders is £35.22
or £2,113.20 over the five year term. This produces an
average saving of £1892.40 (£2113.20 - £220.80
= £1892.40). Or a saving of £1041 (£1261.80
- £220.80 = £1041) when comparing the cheapest lender
(Nationwide) with Protection-Insurance.com.
About Protection Insurance
www.protection-insurance.com is an internet based insurance
business dedicated to getting consumers the very best insurance
rates and the best products.
Our product portfolio includes many specialist products as
well as life and critical illness insurance; car, caravan, home
and self-build insurance; car tyre insurance; mortgage payment
protection insurance and income protection insurance.
