Home protection plan for home loans!

By BankBazaar | November 2, 2012

The huge amount of loan that one obtains for acquiring a home for himself is a burden that shall stay for quite some time. With the increasing number of home loans being disbursed a new problem that is being faced at times is the question of who shall pay the home loan in case of untimely demise or sudden loss of job of the borrower. Though the property being bought is mortgaged with the financier there may still be the problem of the house being under construction not having reached its resale value. Additionally no borrower would want his hard earned home to go away in case of his death or his family members having made to bear the burden of the repayment. It is with this background that the home protection plan to secure the home loan comes into play.

What is Home Loan Protection Plan?

 

Simply stated this is insurance that the home loan provider also offers to the borrower in order to cover the balance of payment in case of death, permanent disability or death of the borrower. This concept is in the best interest of both parties involved as it provides security to both. This ensures to the bank that the outstanding loan amount is always covered and to the borrower that his family members will not have to bear the burden and the dream home will still be their in case of an unforeseen eventuality. In most cases the insurance premium is paid in one time lump sum amount.

Key benefits of the Home Loan protection Plan

 

Listed below are some of the benefits that the customer can look forward to while paying the premium of a home loan protection plan:

  • The burden of repayment shall not pass on to the family members who can continue to stay in that home without having to pay up the outstanding amount.
  • This protects your loan in times of financial instability by covering the outstanding amount even when you lose the ability to generate adequate earnings for repayment. The asset still remains with you in all cases.
  • Since the cover is for critical illness too one can seek help of the cover in case of serious ailments that take place in subsequent years.
  • In certain cases the premiums paid toward the home protection plan is counted towards the total repayments of the home loan and is hence eligible for tax exemptions which one can take benefit of.

There are various options that one can opt for including a single-premium home loan insurance cover. The payment of this premium depends on factors such as the amount of loan, health condition, age and the policy tenure. Factors such as higher loan amount or even a higher age bracket may result in a higher premium and similarly a better medical report will certainly help borrower get adequate insurance cover with a lower premium.

Currently many leading insurance companies in India are offering such insurance cover plans for home loans such as ICICI Pru Home Assure, LIC Mortgage Redemption,Aviva Life Shield Platinum and the SBI Life Smart Shield. The rise in the number of people availing home loans has given rise to brisk business for these policies too. In fact many housing finance companies have made it mandatory for the borrower to take a suitable home loan protect plan along with the home loan is that all concerned are safe and secure.

All information including news articles and blogs published on this website are strictly for general information purpose only. BankBazaar does not provide any warranty about the authenticity and accuracy of such information. BankBazaar will not be held responsible for any loss and/or damage that arises or is incurred by use of such information. Rates and offers as may be applicable at the time of applying for a product may vary from that mentioned above. Please visit www.bankbazaar.com for the latest rates/offers.

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