With the condition of today's economy, many people are being more diligent and conservative with their finances.  They are also looking for ways to protect themselves due to a very unstable and unpredictable economic future. One of the ways homeowners can protect themselves is with "loan payment protection insurance".  This type of insurance is different than the traditional mortgage insurance and disability insurance. 

Loan payment protection insurance is a type of insurance that covers any type of installment loan other than a home mortgage.  "Mortgage protection insurance" is available to cover one's mortgage, but it does not cover any other types of loans you may have.  Both of these types of insurance are designed to help the insured make payments or repayments in the event of an accident, long-term illness, disability, hospitalization, or involuntary unemployment.  Generally, loan payment protection insurance only offers the insured protection for a limited amount of time.  This time frame is usually about 12 months, but can be extended to 24 months or longer.  Of course, the premiums for longer coverage are usually significantly higher. 

Loans that may be covered by loan payment protection insurance include an automobile loan, boat loan, RV loan, and some types of credit cards or revolving credit accounts.  Not everyone qualifies for this type of insurance.  Retired persons and people who are only employed part-time are usually not eligible.  Also, some people who are self employed may not qualify, depending on their type of work and financial situation. 

The general qualifications for applying for this type of coverage are as follows: 

1) The applicant must be 18 years of age or older 

2) The applicant must be gainfully employed at the time the application is made

3) The applicant must not be receiving any type of income assistance (either state or federal) at the time of application

*There may be other qualifications as determined by the issuing companies' policies. 

There are also other types of loan payment protection insurance. One type of policy coverage can pay off a loan or debt in the event of the policy holder's death or permanent disability. This type of coverage is especially useful, as well as reassuring, for families with a single income.  Also, there is "GAP" insurance which stands for "Guaranteed Asset Protection".  This type of insurance covers a car loan in the event of an accident.  When a car is first purchased it automatically decreases in value the minute you drive it off the car lot.  Being that car insurance only covers the actual value of the car, GAP insurance will pay the difference in the value of the car versus the actual amount owed on the loan for the car.