Home Loan Insurance - A cover worth investing!

01-Feb-2020    |    Source:    https://www.mid-day.com

Homebuyers need to find good insurance coverage when buying a house. The right home loan insurance plan protects the family from loan liabilities in case of death of the borrower 
 
So your home loan is finalised. Have you considered insuring this loan? If no, this is the right time to do so-As the breadwinner, an insurance cover against the home loan is an assurance that the asset you have purchased will stay with the family under all circumstances. And, you can accomplish it at only a small additional cost. Home Loan Insurance Plan Most banks today offer insurance plans with home loans but it is important to choose the right one for you. {Many people confuse it with home insurance plan so it is important to know the difference.) While home loan insurance plans tend to get little expensive than regular insurance plans; they also offer certain tax benefits, So, it is important to study various parameters of home loans and insurance plans before finalising the right one, Why take a chance with hard-earned money? The Insurance cover When taking a home loan, lenders usually force borrowers to take an insurance cover from them. The home loan cover from the lender may not be the best option as they may be looking to recover the out-standing in case tile borrower pass-es away and also earn a handsome commission from you. It is essential to compare different policies and opt for the one that suits you best, there are several policies that can give more benefits at lower costs. And these work out to be more cost-effective for young borrowers. Who is eligible Any individual who is eligible for a home loan is also eligible for home loan insurance. Your insurance premium that is broken into smaller amounts is added to your EMI. Bear in mind that while you are paying a small premium on the sum insured, you are paying an Interest on the premium amount as well. The premium Is calculated taking into account the total tenure of your loan, the amount and the age of the borrower. Higher the tenure, higher is the premium. Similarly, higher the age, higher is the premium amount If an individual has touched the age of 40, it is compulsory to have a health checkup. In case there is a medical condition, the premium charged would be slightly higher. How to claim it? In case of an accident or a permanent disability, members of your family must file a claim by making a written application, along with all relevant documents such as the death certificate, medical certificate and so on. Once these documents are verified, the insurer will pay the amount to the bank or to the nominee in the insurance policy. 
Cover from a general insurer In the event of the borrower's demise, these covers automatically pay up the entire loan amount that is outstanding at the time of death. Some of these insurance covers also pay the equated monthly instalment (EMI) for up to three months in case the insured loses his Job. The premium for these policies is usually a single upfront payment. Most lenders add the premium paid on these policies to the loan amount and accordingly increase the EMI. In fact, they are keen that borrowers buy this cover so that they are safe-guarded against a default Term cover To cover the liability for the entire home loan and get a good value for the paid money, choose a term insurance cover, When you are trying to determine how much sum assured you need, it is important to take into account all the loans you have taken. When you buy term insurance from a life insurance company, you pay an annual premium. For a home loan cover from a general insurer, you have to pay the entire premium upfront The best part about using a terra policy to cover your home loan liability is that you can simply distance, the time it when you don't need it by not paying the premium on the policy. A person should ideally do so at the time of retirement, provided he has managed to meet all his financial goals by then. The term insurance cover will take care of the home loan liability and also provide for the family's other financial needs. 
 

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