Loan Protection Insurance, or Consumer Credit Insurance is a type of insurance that is designed to protect people who are taking out a loan, specifically for a mortgage, personal loan or credit card. 

It should protect the policy holder in the event that they are unable to make their loan, credit card or mortgage repayments due to unemployment, disability, an accident or sickness. 

However there has been a lot of controversy lately regarding mis-sold LPI policies, so it can be hard to distinguish between fact and fiction. 

Here are a few things to consider about your LPI product. 

Is Loan Protection Insurance mandatory?

LPI and similar products are not compulsory. Your salesperson or insurance company should never tell you that it is mandatory to buy an LPI or CCI product. 

If they do tell you that it is mandatory, it can be counted as mis-selling their financial services. 

Whether you think you need LPI is up to you. You may want it in the event you become unable to work, and can’t afford your monthly mortgage payments, but it’s important to assess whether it will be a good value insurance plan for you. 

You should always seek financial advice from a trusted advisor, and make sure your insurance cover is suited to you. 

What Does LPI Cover?

What your insurance policy covers will depend entirely on your unique agreement. Generally, it should help you pay off your mortgage or personal loan if you become ill, have an accident, or lose your job. 

However, there are many stipulations, terms and conditions that could make you ineligible to claim. 

If you are only casually employed, or already have a known disability or illness, your insurance may pay you nothing. 

If you are ineligible to claim, it may be an indicator that you have been the victim of a mis-sell. 

Should You Purchase LPI

There are a few things you should consider when deciding whether you want to purchase an LPI policy. 

• Are you eligible to make a claim?
• What will your insurance pay?
• Is it in your best interests?
• Is it good value for money for you?
• Do you have existing cover?

It’s important to do your research so you can make a smart, informed decision. Don’t just listen to the person selling it to you, make sure you find your information from multiple, trusted sources.

This way you can reduce your risk of getting ripped off or mis-sold.

What if you’ve been mis-sold?

If you’ve mis-sold LPI, CCI or any other similar product you may be eligible to claim for compensation. 

You might have been mis-sold if;

• You were told the policy was mandatory
• You were pressured into buying it
• You were ineligible to claim and not aware of this
• It was hidden in your paperwork so you weren’t even aware you had purchased it
• It was sold as a packaged deal
• You were already covered by your existing insurance 

If you think you have mis-sold LPI, RTR Claims can assist you with your claim. You can start your claims process here. 

We look after the whole process for you, so you don’t have to. We work on a No Win, No Fee basis, so you have nothing to worry about.