Everything You Need to Know About Home Loan Insurance
Home loan insurance is also known as mortgage insurance. It can cover the outstanding loan amount if you fail to pay the EMIs. This situation can arise due to the borrower losing a job or sudden demise. The best Indian bank will offer:
• a basic home loan insurance plan and
• one with additional features and riders with more enhanced coverage.
Insurance makes sure that your family or other dependents are not homeless in your absence. Work with a bank that lets you customise the product. Apply for the insurance through the mobile app that is quick and easy with minimal documents. Pick from either term insurance or separate home insurance to protect your home loan. But before that, below is a detailed guide to help you make an informed decision.
Benefits of a Home Loan Insurance
The insurance will protect till the end loan repayment term. Here are a few advantages:
1. Tax benefits under Section 80C of the Income Tax Act 1961 on the premiums being paid on the home loan cover.
2. The borrower has an option to convert the insurance premiums into money that can be used as the home loan EMI.
3. You have an option to include medical issues like major illnesses and disabilities in a home insurance plan in exchange for a few extra charges.
4. The best home loan in India has single-premium contracts where the payment is cleared at once. The bank will add the same to the loan amount and pay the EMI along with the premium.
5. The insurance offers a lump sum payout that can settle an ongoing mortgage.
6. Loan insurance will cover multiple medical conditions including heart attack and cancer which makes it quite a useful product.
The Importance of a Home Loan Insurance
A reputed bank will offer the product at a reasonable rate. You can get the insurance and the loan at an interest rate that suits every type of budget. This makes it possible to clear the EMIs easily instead of troubling your family. There are fewer risks of having to abandon the property due to non-repayment of the installments. Different home loan insurance plans help to safeguard the future of yourself and your loved ones. You can purchase the product when you have an existing housing loan or are planning to get a new one.
Banks do not allow you to get it whenever you wish to. It is a good idea to check your eligibility online or get in touch with the customer care service providers to know how to qualify. You can also visit the bank branch for face-to-face interaction for a clear decision.
Getting a home loan insurance plan in India is not mandatory. It is up to you whether you wish to invest in this product. However, it is always recommended to opt for one since it comes with a plethora of benefits that work in your favour. Home insurance and home loan insurance are two different products. Read well and pick the right one.