A lot of financial institutions offer home loan insurance policies while offering a home loan. It is not mandatory to purchase or there are no set guidelines for it but if it comes with the loan or purchasing independently at a good premium rate is not a bad decision at all. A home loan insurance is not typical home insurance; a home loan insurance is the settlement that is paid by the insurance company if the borrower fails to do so in the event of his/her death. It is a great relief for the family who will still have a roof over their head without having to worry about the house or loan repayment.
What are the types of Home Loan Insurance?
Financial Institutions typically offer three types of insurance plans:
The insured items and the coverage remain the same throughout the tenure of the loan.
The coverage remains the same in the first year but reduces with each passing year.
Coverage and outstanding loan reduce with tenure.
Features and Benefits of Home Loan Insurance:
- Home Loan Insurance provides a lump sum benefit that can be used to repay the loan.
- Policy is subjected to lapse if the home loan is transferred, loan restructuring or full repayment of loan.
- The lump sum amount is to be paid to the policyholder or beneficiary.
- The borrower even enjoys tax benefit under Section 80c and 80D of the Indian law.
- If the loan is joint, a single home loan insurance will cover both borrowers.
- With additional premium this insurance can also cover medical conditions like, disability and critical illness.
- The borrower can either pay the premium annually or make the whole payment in one go.
- Borrowers can also convert the premium into EMIs.
- Home loan Insurance gives coverage for certain diseases like cancer, heart attack, etc.
- Home Loan insurance does not cover suicide or natural death.
Home Loan Insurance doesn’t seem like a bad idea if one had to weigh all options. However, the final decision lies with the borrower who would know what suits his/her interests and pocket best.
With Finserv MARKETS, applying for a Bajaj Finserv home loan online is easy, quick and completely hassle-free. What’s more? You can avail a host of other features and benefits under PMAY scheme, right from the comfort of your home. So why wait? Head over to Finserv MARKETS, and apply for a home loan with us, today!
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