We all dream of buying a house at some point or the other however the harsh fact is that it’s not easily achievable by all. Buying a house or investing in a property needs planning and a lot of saving. We all have bought life insurance policies to secure future for our loved ones and also to be able to handle our tax requirement.
Did you know that, when you take a life insurance policy to ensure your family in the hope that your family gets a substantial amount when you are gone and if you have also taken a home loan but you are unable to pay the loan before you depart the world,In both these cases, your family will have the money but no “home”. Suprising and shocking, is it??
You obviously had best intentions in mind when you bought the life insurance policy and that was to secure your family’s future. Did you, however think before taking a home loan. When you factor in a repayment plan, did you make arrangements of how the loan would be repaid, in case of you untimely departure?
To avoid a catastrophe of a similar kind and to ensure your family still has a roof over their head, its always best to take an insurance cover for your home loan liability. There are various insurance plans that include
- Reducing Balance Cover
- Full Loan Amount Cover
- Critical Disease Cover
- Permanent Disability, etc.
The premium amount will obviously differ with each policy and hence, you MUST go through details of various products and benefits of insurance companies. It is vital to compare the premium and risk coverage and choose accordingly.
Things to consider when you want to choose a policy for your home loan protection
- Life Cover and Loan Liability – LIC policies come with various benefits, the term life insurance cover, is the preferred one in this category.
- Covers Life – The term, “life insurance policy”, is a basic yet an affordable option and gives financial protection. You can even choose the life cover basis your family’s needs and various stages of your life.
- Covers Critical Illness- It covers critical illness too, if you are ensured and in eventuality of your suffering, you get a lump sump amount equal to the sum you ensured. You can then use this money towards the payment of your EMI of the home loan.
How does it work?
The home loan protection plan is issued by an insurance company and not by a bank or a financial institution. You are eligible for this plan only if you take a home loan. In the event of your demise, the insurance company will settle your home loan with the lending bank under this protection policy.If you have taken a joint home loan with several other borrowers, a single group life cover will include all borrowers as well.
Life insurance policies in general are, divided in various groups based on your requirement.It is best to visit a site that compares various policies based on your needs and requirement. One such website that I know off and have personally tried is this one-
We all need to have a basic understanding of the financial policies and a foresight to be able to make better judgments. These policies provide you additional benefits besides helping you organize your tax payments. Life is unpredictable and unknown. Let’s plan and prepare better!!