Insurance - Being accepted after sickness claim

jstallan

A friend of mine had a car loan and due to long term sickness relyed on the 'sickness cover' (the official term escapes me at the moment) to cover the last 12 months of the loans repayments.... He has now returned to work (over 12 months ago) and is looking to get a new loan to purchase a car. Will there be any discrimination against him because of his past?


John

Debt_Free_Chick

Not for a loan, I wouldn't have thought. However, if he wants more sickness insurance (Payment Protection Insurance), then his claim may be taken into account when the insurer decides on how much he has to pay for this.

An alternative is to ignore the PPI and take out separate income protection insurance, instead. This is completely separate from all loans/debts and simply pays you an income if you're unable to work due to illness. You then use that income to pay your bills, including any repayments due on debt.

Martin has an article on this on the site ... I'll need to find the link, though.

HTH

Debt_Free_Chick

Here's the link

http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1094821881,2285,

The article refers to credit card protection insurance, but the same principles apply to loan insurance.

Towards the end of the article there are links to Martin's recommended sites to get quotes for income protection insurance.

Regards