Ppi

ppi_confused

I am considering taking out income protection or possibly loan protection for a loan I am considering but want to know what happens after the 12 months expire should the worst happen and I have to make a claim. Most of these insurances only pay for a maximum of 12 months and what happens if there are more months left at the end of the insured period.

lisyloo

Quite simply, the insurance won't pay out.

It's difficult to say what would happen because I don't have enough details, but if it is a SECURED loan then the item that it is secured upon (car possibly) can be repossesed if you don't make the payments.
If it is an unsecured loan and you didn't pay then you'd get warnings and ultimately the baliffs would come round and take anything of value from your property to sell.

There are several things you can do.
a) save up some money yourself in addition to the insurance.
b) don't get loan insurance, get insurance for your income (then you only need to pay for one policy and not one for each loan and credit card). You can certainly get policies that cover you against sickess until you retire (when your pension kicks in).

If you give more details then it will be possible to be more specific.
Is it a secured loan?
What risks are you anticipating? e.g. is it sickness? or something else?

ppi_confused

Thanks for your reply.
The loan I am thinkinging about will be unsecured and I am wanting insurance for the payments and other utility bills to last for at least the period of the loan (5 yrs.) to cover for sickness, accident and unemployment, probably by way of income protection rather than just loan protection. Most quotes I have been given cover just for the 12 months.