Home Loan Insurance
Home loan insurance is the insurance against your home loan and not for the home. Home loan insurance is the kind of insurance that protects borrowed home loan and helps to make payment during the times when you meet accident, sickness or lose your job. A home loan protection plan ensures that a certain amount of money will be available for the repayment of your home loan in case of your death or disability that results in loss of income. So, while applying for a home loan, one can be sure that anyhow, loan will be repaid back. Many applicants also consider it as an expensive and complicated point and hence often avoid it due to their unawareness. Though, home loan insurance is not mandatory, it is always recommended so that your family still owns a home even if you fail to pay the premiums of your home loan due to your job loss, disability or even death. Insurance against home loan is to make sure that particular amount of money will be available, if someone fails to pay back his/ her home loan. It is always advisable to have a back-up plan for the repayment of finance and this insurance will work like same.
Premium of home loan insurance will be depending on the amount of home loan, the age of the insured and the loan tenure. However, the premium goes up if the age of the insured is high, the loan amount is large, the repayment period is longer or if the insured has had a heart attack. The premiums can be paid on monthly basis as well as one time upfront payment option is also available. It is like term life insurance in which, insurance cover keeps coming down as the EMI's are paid. In some cases, the coverage, instead of reducing balance, are based on flat rate, where the beneficiary gets a fixed amount irrespective of the outstanding loan amount at that time.
