is Payment Protection Insurance worth taking with unsecured loan?

Question

it is rather expensive, and i could always sell a car i need it for to pay off if my situation is difficult.

i also have savings that could pay off my loan fully if necessary.

Answer 1

It's a terrible deal. Buy a term insurance policy if you need something but the insurance bundled with the loan has extremely high rates.

Answer 2

Dont bother getting it, it is a total scamm and unnessecary if you have a good job and know you can make the payments quite easily. I had payment protection on a loan of mine, i spoke to a financial adviser who told me to ring the bank as it was a total rip off, since then i have bought a car and had another loan and never taken the payment protection, they always have certain rules too huge loopholes so its not worth it. You can actually get payment protection off the internet for a few pounds a month, i cant remember which websites but they will cover the loans you have and pay you money for personal expenses if you ever lose your job, this is much more worth it and definately worth looking into.

Answer 3

I would not take the insurance offered with the loan, the rates are high and if you come to settle the loan early you will probably find that the rebate on the insurance premium is poor leading to a much higher settlement figure than you imagined.
My advice would be to approach a different company to arrange the insurance. If you currently have insurance for your mortgage have a word with this insurance company to extend your existing cover.

Answer 4

If you are always going to be in a position to pay the loan off for certain then you don't need it; are you sure you need the loan at all. If you take the insurance read the small print very carefully to make sure you will be covered. PPI is notorious for finding reasons to not pay out. A typical catch is that you have to be medically completely unable to work, not just unable to do your usual job. And you probably need to be employed, not self employed

Answer 5

Assuming you are even being given a choice, then it really depends on whether you feel secure in your future earnings. Anyway if you have the cash why not avoid all the charges? The interest on savings is nothing close to what you will pay to borrow the money. Locking up your cash is a luxury that is costing you extra.

Do the comparison and consider the difference you would save as a gift being offered to you. Can you really afford to turn it away?
If so then insurance, which is usually a fraction of interest, shouldn't really bother you

Answer 6

As a rule of thumb, do not bother if you can afford to get out of the loan in a problem situation. The insurance is now TAX qualifying, so 17.5% is straight to Mr Blair. The dealer.bank makes about 25% commission, so value for money it is a bit poor.

Answer 7

Forget the payment protection but insure the car fully comp so you will get the value of the car if the worst was to happen although the value of the car would go down over time it would still be a big chunk of your repayment ,that is if your buying a car with the money. good luck.

Answer 8

Never take PPI. I'll repeat it... Never take PPI.

If your personal situation means you'd benefit from money if you're unemployed/sick, take out separate income protection. I personally use antinsurance.co.uk , this gives me £400p/m if I'm sick for a fiver a month - far less than what I'd pay for PPI.

Answer 9

i agree with bostonian, payment protection is pricey from the dealer. But i do reccommend term life ins. as i recently had a friend wife call me after he died and she can't afford the truck, tough situation, and no ins to cover the balance.

Answer 10

no.....if you have good life insurance you should have enough to cover the debt..and like you've said your self you have enough savings if your situation ever changes so why pay back more than you have to.