Loan protection insurance is an add-on to your personal loan. If you have this insurance and you end up in a position where you can’t repay the loan, your insurance will pay the minimum repayments. Situations which might occur to make you unable to repay your loan could be that you have lost your job, or cannot work because of illness or injury. This insurance is usually taken out when you first apply for your loan, but you can sometimes apply for it later down the track.