Loan protection insurance is a form of consumer credit insurance and is also known as junk insurance.
It can be found on your car loans, personal loans and home loans. You may have been charged for loan protection insurance from any insurer or bank.
Loan protection insurance generally covers you for one or more of the following:
- Accident and Sickness
- Involuntary Unemployment
You will need to check your loan documents to see if you have paid for loan protection insurance.
The level of cover will usually appear on your policy schedule.
Your policy schedule is the document that you would have been given when taking out the loan protection insurance and outlines details such as the price that you paid for the policy.
Why is Loan Protection Insurance junk insurance?
There are several reasons why loan protection is useless. Depending on your circumstances when you took out the cover, you may be unable to claim on the policy.
Loan protection can also be extremely expensive. Most policies cost thousands of dollars.
These policies are added to your loan and also incur interest charges.
The cost of loan protection including interest can be as high as one-third of your loan repayments.
Am I eligible for a refund?
There are many reasons why you may be eligible for a refund.
1. It might be useless to you. For example, depending on your employment contract at the time you purchased the policy, it may not cover you.
2. Premiums are expensive. Expect to pay over $2000 for loan protection. Many loan protection policies also charge interest on the premiums. Some policies work out to cost one-third of your loan repayments.
3. Payments might not cover the full amount of debt. For example, loan protection may only cover you for a brief period. That means, that there will still be a substantial amount left to pay on your loan.
4. A crafty sales process. A salesperson will sometimes add loan protection onto a loan or credit card without explaining what insurance is, or without you knowing.
Do I have loan protection insurance?
Loan protection insurance can be called several things.
Claimo offers a free service to help check your documents to identify whether you have paid for loan protection insurance or any other consumer credit insurance product.
How can Claimo help?
At Claimo we are experts in consumer credit insurance and know all the reasons why you should get a refund on junk insurance.
With over 10 years experience, we take the time to establish and manage your claim.
Claimo work on a No Win No Fee basis which means, if we are not successful at getting your refund, you don’t have to pay us anything.