Home Loan Insurance For Secure Home
Home loan insurance is often confused with home insurance. Home loan insurance is not insurance for your home but for your home loan. Home loan insurance enables you to make prompt payment in case you met accident, sickness or loss job.
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Home loan insurance is sold the least because home buyers consider it as expensive and complicated. The premium of home loan insurance are high if you are older, the loan amount is larger, longer repayment period or if you have already had a heart attack and in high risk category.
Home loan insurance ensures sum of money towards repayment of your loan in the event of your death, disability or loss of job resulting in loss of income. Consider that you took a home loan for Rs 10 lakhs. In two years of time you had made prompt payment of Rs 2 lakhs. At this point you met with accident resulting loss of your income. There is no other source of income to repay your loan amount. In this case, your insurance company will pay your loan. The loan is not for entire 10 lakhs but for amount remaining i.e. Rs 8 lakhs. This ensures that your family or dependents do not have to worry about the loan repayment and your home will be secure.
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It is highly recommended for home loan insurance to ensure that your family still has a home, even though you failed to repay your loan in the event of your death, disability or loss of job. Home loan insurance in not mandatory for home loan but it is highly recommended.
When you get home loan insurance, ask your insurance company whether it is for death by any cause or only for death by accident. Also check whether there is a permanent disability or loss of job clause. If this clause is present, the insurance company will clear the loan in the event of your permanent disability or loss of job resulting in loss of income. Some insurance company will not offer the insurance cover if death occurs within 30 days of the start of the insurance cover and the death is due to suicide.
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Sometimes home loan companies will team up with home loan insurance companies to offer insurance for home loan. You need to make good market research to find home loan insurance that suits your need and to ensure its premium can be affordable by you.
- If it is a joint loan, two policies will have to be taken in the names of the joint applicants.
- If you already have a home loan but no insurance either approach home loan company or approach any life insurance company for home loan insurance on your home loan.
The home loan insurance ensures that your dream home or an apartment is safe and secure! It acts as a backup when you fail to repay the outstanding monthly installments on your housing loan. The increasing loan rate on housing in India also has gained momentum for home loan insurance.
