What is Home loan Insurance?
Your home is your private sanctuary, and definitely, you would want it to be safe and secure. Buying a house is a major investment that one makes in their life. Moreover, you would also agree with the fact that most of the people take a home loan to buy their dream home. But, it becomes necessary to repay this loan on time. What if there are circumstances which forbid you from making the payment, it can be critical illness to the borrower, job loss or even the sudden death of the borrower. To avoid difficulty in such situations, it is advisable to opt for the home loan protection plan.
It is a popular product nowadays but offers limited benefits. Hence most of the companies today suggest term insurance. Remember, a trustworthy home loan insurance protects not only your home but also your memories associated with the home.
The primary objective of availing home loan insurance plan is to help the insurer settle the outstanding home loan amount in case of unforeseen circumstances. Some of the home loan insurance providers also provide home loan insurance plans that cover the applicant, house, and all its components. The premium which is paid towards home loan insurance is applicable for tax benefits.
Why do you need home loan insurance and what does it cover?
Well, buying a home is not easy, it involves a considerable amount of investment, and thus there is a need to keep this insurance safe. Nobody would want to pass on the liability to their next generation in case of some unforeseen circumstances. In these situations, home loan insurance comes as a boon. It not only protects you from the sudden burden of EMIs but at the same time, it also has tax benefits.
If you have taken the home loan, it doesn’t necessarily mean that it’s an end of the financial burden, in case of an eventuality, the load might just come on the family members and hence, it is suggested to go ahead with home loan insurance.
In case of early death of the loan borrower, the burden of EMIs falls on the family members. One can get rid of this by opting for a term insurance plan. Term Insurance is a popular home loan insurance product.
It’s one of the cheapest form of life insures which is meant to protect the entire family. It also provides better life cover and that too at a lower cost. So, if you have taken a home loan, it is advisable that you must go for term insurance cover.
How does the term insurance help you?
The first and foremost benefit of term insurance is that it reduces risk. The term insurance plans claim that it will help in meeting the home loan liability in case the borrower dies.
Key Features of Term Insurance-
1. It’s affordable- One would never want to shed down their burden on the family members, so, if you have taken a home loan, most of the insurance providers would suggest you avail term insurance. As mentioned above, it is highly affordable and will cover up the cost of the outstanding amount in case of the death of the borrower. You should compare the premium of different companies go for the one which is affordable and easy on your pocket.
2. Change lenders with term plans- It gives you an added benefit of changing the lender without any need to relinquish the insurance premium.
3. Term insurance comes with significant benefits- Apart from being an affordable plan, term insurance provides the nominee full amount irrespective of the time when the claim is made. The nominee can use this amount to settle the outstanding home loan amount. You have the flexibility to choose the period of payment of premium, i.e., you can decide whether it is going o half-yearly, yearly or monthly. Additionally, this insurance also gives you the tax benefit under Section 80C and 80D
Comparative Table of the Popular Term Insurance Plans
|Insurance Providers||Plan||Maximum Maturity||Min-Sum Assured||Claim Settlement||Premium (for coverage up to one crore)|
|MAX||Online term Plus one time lump sum plan||70 years||25 lac||97%||Rs. 1073 per month|
|Ageon Religare||iTerm||100 years||25 lac||97%||1286 per month|
|SBI||Poorna Suraksha||60 years||NA||96%||2255 per month
|IDBI||IDBI Federal iSurance Lump Sum Plan||80 years||30 lac||95%||1509 per month|
|SBI||eShield||60 years||NA||96%||904 per month|
|HSBC||iSelect Lump Sum||70 years||25 lac||94%||854 per month|
|TATA AIA||Tata Sampoorna Suraksha Lump Sum||70 years||50 lac||96%||865 per month|
|KOTAK||e-term||75 years||25lac||91%||872 per month|
|DHFL||DHFL LIFE||75 years||25 lac||90%||903 per month|
|BAJAJ||eTouch Lump Sum||70 years||50 lac||91%||1266 per month|
|AVIVA||iTotal Protect||75 years||50 lac||90%||1114 per month|
|Ageon Religare||Life Plus||80 years||30 lac||97%||903 per month|
|DHFL||DHFL Life||75 years||25 lac||90%||903 per month|
|Birla Sun Life||Birla Protect @ Ease Lump Sum||70 years||30 lac||94%||1070 per month|
Why should you not compromise on term insurance?
You would notice that some of the insurance companies would suggest you buy Home Loan Protection plan but it’s always better to go with Term Insurance as these places are more affordable, easy to avail and also comes with series of events, here are few of them :
- Loan Protection: The most important aspect of Term insurance is that it protects your family in your absence. The nominee gets the entire amount and can payout the pending home loan amount from the same. In case the money is left, the nominee can keep the whole amount.
- Health Protection: This insurance plan gives you the benefit of both life and health insurance. You should contact the insurance provider to discuss the health insurance and diseases it covers as it may vary from one company to another
- Saving & Control: Lastly, if you wish you can also continue this plan after repayment of the home loan to protect your family from unforeseen circumstances.
Our Role: Loanyantra act as a mediator to help you choose the right term insurance plan. However, our role is not merely restricted to a selection of insurance plan we also help you decide which plan is better and suitable for, we also help you find the cheapest home loan options and also take care of the complete paperwork to make you task easy and hassle-free.