House Loan Insurance: What is it and Why do you Need it?
In recent years, housing loan insurance has been booming among Home Loan borrowers because of the unpredictability of human life. During the sudden demise of a borrower, opting for house loan insurance will cause the insurer to repay the loan amount.
Moreover, opting for housing loan insurance has become quicker and smoother. Borrowers can apply for this insurance from the comfort of their homes. Interested borrowers can continue reading to learn about house loan insurance in detail.
What is house loan insurance?
Home loan insurance is a kind of insurance policy where an insurer repays the loan amount during any unforeseen incident such as the death of the borrower, accident, job loss or other. Thus, under this insurance scheme, both the borrower and insurer agree to clear home loan EMIs in the absence of another during times of emergency.
Home loan insurance is of utmost importance for saving borrowers from losing their home ownership. Furthermore, borrowers can also claim tax deductions upon availing an insurance on their home loan. To determine the premium amount, borrowers can use a house loan insurance calculator.
Features of House Loan Insurance
House loan insurance protects individual borrowers from various risks of the loan. Here are some key features of Home Loan insurance to consider:
Outstanding loan coverage
The primary feature of home loan insurance is its ability to cover the remaining balance under unforeseen circumstances. In this scenario, the insurer steps in and clears the outstanding loan amount. Thus, it reduces the financial burden on the borrower’s family and protects them from losing ownership of the home.
Term flexibility
Individual borrowers are eligible to choose home loan insurance coverage duration. Typically, the insurance policy term aligns with the Home Loan tenor.
Illness coverage
This is another significant feature of Home Loan insurance. This coverage is applicable when the borrower is diagnosed with a serious illness which might affect repayment. Thus, diseases including heart attack, stroke, and cancer which are expensive treatments and need medical expenses are covered by this insurance policy.
Benefits of taking a home loan insurance
After a thorough understanding of housing loan insurance, one can look at its benefits mentioned below:
- When borrowers opt for a housing loan, it is the lender who decides the loan tenor and loan amount to be issued looking at the repayment ability of borrowers. Choosing a home loan protection plan reduces the risks of lenders in lending out loan amounts. In this plan, lenders offer home loans at affordable rates of interest to make EMIs affordable for borrowers.
- Borrowers can claim tax deductions on premiums paid towards housing loan insurance covered under Section 80C of the Income Tax Act. With these deductions, borrowers can save a lot in the long run.
- One of the biggest benefits of a home loan insurance policy is it protects borrowers from losing ownership of the property. In case of sudden death or accident of the borrower, the insurer remains solely responsible for covering the loan EMI amount
Several reputed financial institutions provide pre-approved offers to existing customers. The products include a home loan, loan against property and others. Availing these offers makes the credit application process faster and smoother. Alongside, interested individuals can go through the official website and check out the pre-approved offers by entering their name, contact details, email address and so on.
To conclude, house loan Insurance provides peace of mind for borrowers during any emergency scenario such as death, serious illness or other. This insurance not only helps to eliminate the financial burden but also secures home ownership. Because of the easy application process, borrowers can avail this insurance in no time and enjoy financial security for themselves and their families.
