Buying a home is a huge investment and buying it without a home loan is next to impossible for most individuals. In this fast-paced life, it is difficult to predict one’s physical and financial health over 20 to 30 years. Therefore, it is always advisableto be prepared for uncertainty in the future. It is highly recommended to protect largeliabilities (especially Home Loans)with protection of Insurance to ensure peace of mind.
Most often, buying insurance seems unnecessary to most people and it is ignored and not given much thought. Different people have different opinions regarding availing of insurance with a home loan and these questions are pertinent for people availing home loan for the first time.
Real estate prices are soaring across the country, hence, taking a higher amount of home loan with higher repayment tenure is advisable to afford your dream home. Availing insurance with your Home Loan has become necessary to protect you financially from any untoward incident in life.
Most lending institutions strongly recommend having Insurance protection bundled with your home loan. The customer can choose to buy Life Insurance, General Insurance or Health Insurance offering various types of cover. To get comprehensive cover, you need to ensure that you opt the most suitable protection to meet your financial requirement.
5 Key benefits of availing Insurance with a Home Loan:
1. Protects Your Investment: If there is a sudden death of the person who is repaying the loan, the family willfeel extremely burdened as they will be dealing with the person’s loss as well as the shock to repay the outstanding loan amount. In such a case, if the family is not able to repay the loan the house, or the collateral against which the loan was taken will be seized by the lending company / HFC / Bankto pay the outstanding loan amount. If there is home loan protection available (insurance in this case), then the family can be safeguarded. The family can claim the loan protection amount which the insurance covers. Despite the loss of the loan bearer, the family will at least not lose the home.
2. Protects the Asset: With home insurance, you can cover your home against unforeseen loss or damage. A home insurance policy is for personal property and covers home content as well as structure. This is commonly known as ‘Property Insurance’ which is offered by most of the leading General Insurance Companies
3. Easy Premium Payment: Most home loan insurance policies are single premium policies, which means the customer will have to pay the premium only once. Because of high premiums, lenders give the option of adding the premium to the loan amount or funding the premium through a separate loan. This way premium is deducted along with the EMI.
4. Additional Coverage: Add-ons or riders can be added to your insurance policy for additional coverage at an additional cost. The additional coverage strengthens the policy and covers against medical conditions, critical illness, disability, accidental death, or loss of jobetc
5. Protects Family: In case of an unforeseen event, home loan insurance protects the family of the policyholder from the burden of the loan payment and the loss of investment. Insurance Claim amount can help re-pay the outstanding loan amount and the additional insurance cover can help family with financial support
