It is important to protect your family’s interests in the asset by obtaining home loan insurance. Which is better: Term insurance or home loan policy? Find out more now!
Most of us have a goal in life to buy a house. Millions of Indians can now realise their dream of owning a home thanks to the availability of digital mortgage plans. It is crucial to create the best EMI plan to ensure stress-free repayments. Mortgage tenures can range between 20 and 30 years. It is also important to prepare for the unexpected in case something happens before the loan is paid off.
A term plan and a home loan protection plan will protect your interest and that of your family in the asset.
Should you choose a policy to cover your home loan or a simple term insurance? Here’s a quick guide to the features and benefits of both home loan insurance and term insurance policies to help you decide.
The scope of coverage
Both policies offer financial assistance. However, the home loan insurance policy only covers the liability owed on the property. A term plan, on the other hand, can cover a variety of family needs.
Home insurance plans are valued at the amount of the outstanding loan. With a term policy, the policyholder can choose a plan that will help them meet all their obligations and achieve other goals in life such as funding the children’s education.
- Gst impacts on home loans
- Does the GST impact home loans?
- Joint home loan tax benefits
- Are you considering a joint home loan? What you need to know
The mortgage agency is the primary beneficiary of home loan insurance. The lender receives the amount owed if the borrower cannot repay the loan due to disability, loss of income or premature death. The beneficiary of a term insurance plan is usually your nominee, which can be a child, spouse or parent.
The duration of the home loan protection policy is equal to the term of the loan. The tenure of the insurance ends once the loan has been repaid. You can choose a term plan for the duration of your choosing, up to the age when you will have debts and/or responsibilities to repay.
What is your best choice?
After considering all of the factors, decide whether you want a term insurance plan or a home loan cover. You may not be able to get another term plan if you have already purchased one for your family.
If you are able to pay for the premiums for a policy that covers your home loan, as well as other goals or needs of the family, then you can avoid having multiple policies and use the one you already have.
Bank offers a curated range of life insurance products. You can get expert advice or a rough estimate using the term insurance calculator. Bank has a range of term plans with affordable premiums and higher sums insured. Whole life coverage is available up to age 99. Tax benefits are also offered on premiums under Section 80C.
You can also find out more about us on our website.
The contents of this article/infographic/picture/video are meant solely for information purposes. These contents are of a generic nature and intended solely for informational purposes. This is not intended to replace specific advice tailored to your individual circumstances. Information is subject to change, including updating, completion, verification, and amendment. This information is not for distribution to or use by anyone in jurisdictions where it would be against the law or regulation, or subject or its affiliates or subsidiaries to licensing or registration requirements. Bank will not be liable for any loss or liability, direct or indirect, incurred by a reader if he/she makes a financial decision based on information and contents mentioned. Consult your financial advisor prior to making any financial decisions.
The benefits, features and offers that are mentioned in this article may change at any time. All content is subject to any other terms and condition applicable, including those of the product and third parties. For the latest updates, please visit our website.