Home Loan Insurance Benefits: The Home Loan insurance or loan payment protection insurance, is a form of payment protection insurance and this type of insurance can help you protect your monthly loan payments if you become unemployed or suffer an accident or sickness. Under any home loan insurance cover, the lump sum amount reduces as the outstanding loan decreases as per the loan schedule.
Benefits of Home Loan Insurance:
- The home Loan Insurance is during tough times, you need to have an insurance cover to take care of the EMI’s or of the outstanding loan amount. This is especially useful in case of death or disability due to an accident or sickness or in case of loss of job.
- The candidates will get benefits like Deduction under Section 80EE, Deduction on pre-construction interest, Deduction on interest, Deduction on principal repayment and Deduction on stamp duty and registration charges.
- This effectively reduces the burden on your family in case of any unfortunate event that occurs with you. They would be saved from the financial problems of paying off the loans and in cases of a joint loan application, a joint loan insurance plan can be taken which will effectively cover you and your partner and both will have the reassurance that if either of you should be faced with redundancy, illness, have an accident or even die, your repayments will be made for you.
- In case of joint loans the applicants need to obtain separate policies of which one application form will be used and it will have the names of the two customers – the premiums will get doubled as well and there are a few companies that provide discounts on premiums in these cases. In these policies, if any one of the applicants passes away then the insurer clears the loans.
- The Home loan insurance is also a similar kind of product like term insurance plans but with a little difference concept. This is a single premium insurance plan which you have to take before loan disbursement with home loan only.
- This Home loan insurance is a single premium insurance plan which has to be taken before loan disbursement with home loan only and Bank is going to add the premium amount with the sanctioned loan amount and then calculate the home loan premium.
- Premium of Home Loan Insurance depends on the below factors like the age of the insured- the older he or she is the greater the premium is and the loan tenure which means the more the repayment period the more the premium.
- The amount of loan – the greater the loan the more is the premium
- Medical history of the borrower – if they are in good health the premium will be lower but if they have had ailments then the premium will go up
- Every person needs to see is whether it will offer death benefit or death by accident and in case of accidental death plans the family does not face any problem with loan repayment even if the insured passes away owing to an accident.
- The candidates can also opt for a good pure term insurance plan. There are many private banks which offer online term insurance plans where you can subscribe for a home loan insurance policy.
For more information about home loan