Loan Insurance

[chr15]

Hello, has anybody here had the misfortune to claim on any loan insurances for accident and sickness? I wonder if it's anything like my experience.

I have a large business loan which was taken out to buy my works van. I had an accident at work in November and was put on the sick for 3 - 6 months, I am now at 3 months and reckon I will be ready to return to work at about 4 months.
I have received one payment from the insurance company a few weeks ago, but after numerous calls to the company I get fobbed off with, 'yes we have received your sick notes' and 'your claim is being processed'.
The hold up means to be my business account is suffering.

It seems that you take out these loan protection insurances but if you have to claim on them they make it so awkward and delay things that it makes you wonder if it's all worthwhile in the first place.

My insurance is the type the bank advises you to take out in case of accident or sickness at work and when the loan is set up they take the whole premium for the insurance and add it to the loan at the beginning so the insurance company have had there money.

Same thing with credit card companies, I have insurance on two cards, - started the ball rolling on them to claim on the insurance, I have since abandoned it because it is just not worth the hassle, it seems these people are quick enough to take your premiums but try to make a claim and hells teeth....they make it so awkward you end up giving up like I have with the credit cards.

I will think long and hard about whether to take out these insurances in the future, especially credit card ones, I wonder if a large income protection insurance would be a better way to go and forget all the individual ones, but it depends on what it costs, I think being self employed complicates things with the insurance companies, although I don't know why it should as it isn't complicated for them to take the premiums from you.

I am feeling the need to put in a complaint to someone about it, just not sure who, some ombudsman or something I guess, I am not a happy man

 

[blondini]

Google payment protection insurance mis-selling. Don't let it go, some lenders have been given very heavy fines by the FSA for mis-selling PPI.

 

[masona]

My mate told me he's got caught out with his mortage loan protection insurance cover but not covered for the first 6 months, I don't have the full story though

 

[JohnD]

I didn't have loan or accident insurance, I took out PHI (Permanent Health Insurance) which pays you an income if you are unfit to carry out your occupation. and was very satisfied when I had a long period of ill health.

It is offered by life assurance companies and the like, some big respectable names such as Zurich and Royal Sun Alliance. The longer "waiting period" you have before payout, the cheaper it is (most illnesses and injuries don't last long) so I had one with a 3-month wait and one with a 6-month wait.

It is essential to get one that covers you for "unfit to carry out your own job" as you might lose e.g. a hand and be unable to work as a joiner, but some policies might say you were still fit for office work so not pay out.

Your own doctor or hospital can give you a certificate, but if you are off for a long time they will want their own doc to examine you. You have to notify them quickly to set t he clock ticking.

Mine would have paid out (index-linked amounts) every month until I died, or reached retirement age, but I got better.

IMO it is better than Critical Illness or Accident or Loan insurance because it pays out no matter what the cause. I feel sure if I had taken out Critical Illness for 100 possible illnesses, I would have got the 101st illness that wasn't covered.

You need to get a few quotes and see what % of Monthly Cover they charge in monthly Premiums. It is quite a serious long-term policy so they may want you to take a Medical Exam (they pay) and will exclude existing problems. If you have your own company you may be able to pay the premiums as a tax-deductable business expense (not sure)

The policies offered by credit card and loan companies are very poor value (1) in limited cover and exclusions (2) because the bank can take up to 90% of what you pay in charges and commissions, so obviously little of the cost goes towards the insurance you need.

On my schemes, as a guide, I think I pay something like 1% (pay £15/month premium, get £1500/month benefit in case of disability) but you need to investigate, as it varies with age and occupation, and I believe rates went up after I took my policies out.

It is an Income Replacement insurance, so if you are unemployed when you have your accident or illness,it only pays out if you are unfit to do ordinary household living (cooking, cleaning, washing I suppose)

Be sure to carry on trying to get what you deserve out of those filthy companies that took your money. Ask where you can go if you have an unresolved complaint. If nothing else you might get your premiums refunded. And of course read the small print next time before you take out cover.

Good luck

 

[Bilioustrumpstaine]

Good starting point here

http://www.moneymatterstome.co.uk/8...inancialAdvice-MakingAComplaint.htm#Insurance

 

[chr15]

Thanks for the replies lads, some useful info and ideas there, much appreciated.
Chris

 

[namsag]

CHr15 Slightly off topic how have you found your incapacity payments. Are they all hap hazard aswell

 

[JohnD]

I got this from moneysavingexpert.com

link at the end

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Hoorah! Loan Insurance to Be Banned!

It's a headline I've long dreamt of writing. Finally the Competition Commission's shown razor-sharp fangs; from 2010, lenders are banned from selling Payment Protection Insurance (PPI) within a week of loans or credit cards; killing their fear-based sales techniques.

Plus 'single premium' PPI, where its cost is added to the loan, accruing £1,000s in interest, will be totally banned.

Isn't loan insurance good? PPI's designed to cover repayments in the event of illness or unemployment. It's not the product, but the way banks sell it that’s the problem.

People have been conned into buying policies costing up to 10x too much; and they’re sometimes worthless as lenders don't bother to check they actually apply to you. No surprise, lenders usually make more profit from PPI than the loan itself.

The new rules are welcome, but sadly won’t happen until 2010, so in case of doubt... "DON’T BUY PPI FROM YOUR BANK!"

Ever had PPI with a loan? RECLAIM £1,000s

Since we launched the PPI reclaiming campaign over 400,000 free template letters have been downloaded, and every day people report being paid out £1,000s. This latest news adds huge weight to reclaimers' cases. Find what counts as misselling & free template letters at www.moneysavingexpert.com/ppi

 

[chr15]

Hi Namsag, yup, the incapacity benefit hasn't materialised yet, and it's now called Employment & Support Allowance for any new claimants, I reckon they owe me about 10 weeks worth now, what with the loan insurance messing me around and the benefits dragging their feet I think my business bank manager is starting to get itchy feet over my lack of a positve bank balance, what a shambles.

 

[namsag]

Yeah i claimed it a few years ago after an injury and it wasn`t till i was doing my books the following year and checking bank statements that i realised they had not paid it till after i had been back for 3 months.
Lucky i was not having to depend on it