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Loan insurance has always supposedly been designed to offer individual borrowers the peace of mind they need to feel safe n the knowledge that their debt is protected against ill health and unemployment. However, investigations into the payment protection insurance industry by the finance industry regulator Financial Services Authority have proved this not to be the case in the last year or so.

Instead of protecting the consumer, loan insurance was a cash cow for high street banks and lenders, providing them with a decent profit as a result of the strict terms and conditions that contain several exclusions. As a result of those very exclusions, many individuals were unable to claim on their loan insurance as and when they needed to. This may have resulted in their debts becoming even more severe and most certainly brought on financial difficulty through no fault of their own. As a result, in some cases, loan insurance represented very bad value indeed.

Some of the exclusions contained within the loan insurance small print should have been highlighted by sales representatives that sold the loan insurance to individuals in, but profits were apparently more important. This simply serves to highlight the fact that the general public needs to be more informed about loan insurance and what it can do for them.

It is most definitely up to the consumer to read the terms and conditions associated with the loan insurance that they are considering to make sure that they would qualify for a payout should they need to claim. This is absolutely necessary for peace of mind and also to escape the individuals that would dupe them for profits and results. Instead of being a statistic, consumers need to be pro active and help themselves because, as far as loan insurance is concerned, there are very organisations that will do it for them.