Home Loan Insurance

Buying a home is one of the most important decisions of financial planning you do in your life. Most Indians buy homes through the adoption of a mortgage from a lender. However, that raises the profile of their peril now owe money to the lender. To mitigate this risk, we strongly recommend getting a protection plan for the mortgage.

Why do I need mortgage insurance?

Taking a home loan in India, has created a liability for yourself. In case something happens to you, the loan must be paid by your regular EMI payments. If none of the surviving members of his family can continue to pay the housing loan, the lender can take your home.

Therefore, if you want to protect your family against the possibility of having their new house owned by the inability to pay their EMI, you must obtain insurance on your mortgage.

What is a security plan loan?

A security plan is that mortgage in the event of death or disability resulting from loss of revenue, a sum of money available to pay the loan. This ensures that your family or dependents do not have to worry about repaying the loan and your house is not removed.

Consider a simple example. Suppose you took a home loan for Rs 10 lakhs. Over the next two years, you've paid hundreds of thousands of rupees 2 lakhs loan amount and have not been paid Rs.8. However, at this point, you meet an accident. No one else in your family is employed and therefore no income for the home loan EMI payments owed to the lender. In this case, if you have mortgage insurance, the insurer shall repay the outstanding amount of 8 lakhs on their behalf. However, if you do not have home loan insurance to risk your home to be assumed by the lender. Your loved ones can find themselves homeless in their family home.

How it works

The home loan insurance is like a life insurance policy term, unless the life cover will be equivalent to the amount of outstanding mortgages in its loan repayment schedule. Your insurance coverage continues to decline as you pay the EMI to reduce the amount of your current loan. Sometimes, coverage may be on a declining balance, but on a contractual basis, where there is a fixed amount paid to the beneficiary, regardless of the loan amount outstanding.

How much?

The price depends on the age of the borrower, the amount of home loan and mortgage loan tenure. Prices are lower than individual life insurance. You can opt for the premium on a monthly basis or a lump sum at the beginning. Some banks may create a premium to the loan EMI.

What are the eligibility criteria for these plans?

In general, the minimum age for this policy is 18 years and maximum age for admission is 50 years. These policies are available for loans to individual and collective housing. These policies may require a medical examination. Check with your lender.

How are claims paid?

Politics is always taken in the name of the borrower loan mortgage. In the case of a contingency, insurance payments are paid directly to the lender, or beneficiary family member. In the event that the borrower pays the entire loan back, the policy comes to an end with the end of the loan term. The borrower does not recover the premium paid if you live beyond the term of the loan.

Are there exceptions?

Yes, the insurer is not obligated to pay a death benefit by suicide within one year from the date of commencement of policy issue or policy, whichever is later.

Must I have a plan for mortgage loan insurance?

It is not mandatory but highly recommended. If you do not want to put her family through any more trouble, it is better to buy a protection plan loan. It is also advisable that the borrower should compare mortgage offers from several lenders and try to find the best home loan, reducing the liability. This will also reduce the cost of mortgage insurance.