Loan protection insurance

Protect your debt repayments - compare loan protection insurance[1]

• Compare loan protection from multiple trusted insurers
• Simple and easy to find the cover you need
• Cover your loan repayments if you can’t work due to illness or injury

What is loan protection insurance?

Loan protection insurance covers your repayments if you suddenly find yourself unable to repay a loan.

It’s a type of income protection that’s designed to provide financial support if you can’t work because you become ill or get injured, or if you’re made redundant involuntarily.

Sometimes known as loan payment protection insurance, it can cover various types of loan, including mortgages, car finance and credit cards.

How long can loan protection last for?

When you take out loan protection, you’ll need to choose how long you’d receive payments for if you were to claim:

Short-term loan protection

With this type of cover, you can receive monthly payments for up to 12 months. This can provide valuable support during a period when you need to recover from an illness or injury and can’t work, or while you’re looking for new employment having been made involuntarily redundant. This type of policy is cheaper than long-term loan protection.

Long-term loan protection

This provides peace of mind that you’ll receive payouts for longer, which might be useful for keeping up repayments for a loan like a mortgage. It can cover you up to retirement and will pay out if you have an accident or illness, but it won’t cover involuntary redundancy.

How does it work? Compare, choose, save

1. Compare quotes with us

Share a few personal details and then compare loan protection from multiple trusted providers. See prices and policy details side-by-side to help you make the right choice.

2. Buy online

When you’ve found the right protection for your needs, click and proceed to the insurer to buy your protection. The insurer will then send you confirmation of your price and policy details.

3. Start making your payments

Once your policy is in force, you’ll then need to make your agreed repayment every month. You’ll make a monthly payment for the term of your cover.

4. Claim if you need to

If you find yourself unable to work, or you lose your job, get in touch with your insurer to claim. If your claim is accepted, they will start making the payments after the initial waiting period. You’ll usually receive payments until you return to work or for up to 12 months.

What does loan protection insurance cover?

Loan protection insurance typically covers you against three main issues that could affect your ability to work:

Accident

Provides support if you have an accident and suffer an injury that means you are signed off for several weeks or months.

Illness

An unexpected illness or surgery might mean you need to take a lot of time off. Your protection can help cover your loan repayments until you’re well enough to return to work.

Involuntary redundancy

If you’re made redundant, loan protection can help you to continue making your repayments while you secure a new job.

Do I need loan protection insurance?

This depends on your situation, the size of your loan and whether you have any savings to fall back on. It can be useful if you:

• Would struggle to meet your loan repayments if you couldn’t work
• Don’t have any savings to fall back on
• Are self-employed and your income would fall if you weren’t able to carry out your job
• Don’t have generous sick pay from your employer

You’ll need to weigh up the monthly cost of your protection against whether you’d struggle to make the minimum loan repayments if you suffered a drop in income.

There are a couple of useful alternatives to loan protection insurance you could consider:

• Payment protection insurance - Covers not just loan repayments but other repayments if you’re unable to work because of injury, ill health, or involuntary redundancy. You can normally protect up to 70% of your annual income.
• Mortgage payment protection insurance - Provides cover for your mortgage payments in case you’re made involuntarily redundant or find yourself unable to work due to accident or illness.

How to get loan protection cover

It’s easy to find the protection you need and get peace of mind.

How much does it cost?

When you take out loan protection insurance, the cost will depend on a number of factors, including:

• How long you need cover for
• How much cover you need
• Your age
• Your lifestyle
• The type of job you have

How to find cheap loan protection insurance

1. Compare options

Take a look at what’s out there and don’t just choose the first policy you find. Instead, shop around and find one that suits your budget.

2. Speak to an expert

If you’re not sure which cover to choose, speak to one of our experts on 0800 8620 723. They can help you find the best protection for your needs.

3. Check your policy

If you’ve already taken out cover, consider whether you’re now in a position to reduce it or cancel the policy completely.

4. Choose the right cover

Although getting the highest level of cover can be tempting, it might not always be necessary. Reducing your cover amount can lower your premiums.

5. Delay your payouts

Before claiming, you’ll need to be off work for a set number of days. Lengthening this waiting period might reduce your monthly premiums.

How to compare loan protection insurance with Go.Compare

Comparing loan protection is simple and straightforward with us.

Share some details

Tell us about you, your employment, what repayments you want to protect, and what type of cover you’d like.

See quotes and options

Compare prices and policy details from a range of trusted insurers side-by-side.

Buy online

When you’ve found the right protection for you, apply for your chosen loan protection online.

Frequently asked questions

What happens to my loan protection policy when I pay off my loan?

When you take out loan protection, you select how long you want the policy term to last - for example, you might want to match it to the term of your loan.

If you pay off the loan before the end of your loan protection policy, it’s worth contacting your provider to see whether you can cancel your cover early if you no longer need it. Alternatively, if you have other commitments you’d like to cover, you might decide to continue paying your premiums to benefit from the peace of mind the protection provides.

Can I get loan insurance if I’m self-employed?

Yes. While some providers exclude self-employed workers or those on short-term contracts, others will provide cover - so check the terms and conditions before you buy.

Does loan protection insurance have a cooling-off period?

Yes. All types of insurance give you a 14-day cooling off period to decide whether the policy is right for you or not. If you change your mind during this period, you can cancel the policy without any obligation.

How soon will the cover pay out?

With most loan protection policies, you’ll have to wait a minimum of four weeks before the cover will start paying out. It means you’ll need to be off work for longer than this before your payments kick in.

Will my loan protection premium increase when I’m older?

No. Your loan protection payments will be fixed from the outset and won’t change unless you decide to make alterations to your policy.