Home loan insurance: Give your family a roof, not burden

A home loan leads one to a long-term commitment. Home loans can extend up to 25 to 30 years. We all know that life is full of uncertainties. If the person who takes the loan expires during the pendency of the loan, the burden falls on the dependent family members. This is the reason why home loan insurance becomes important.

Features

Home loan insurance works just like term insurance. One can be covered under this insurance till the period of loan repayment.

Once the outstanding loan amount has been paid, the insurance term ends. However, if the individual who is paying the loan and covered under the policy, expires within the loan term period then the loan insurance can be claimed by the family to repay the outstanding home loan amount.

Premium

According to experts, most home loan insurance schemes come with a one-time premium payment option. Buyers also have the option to club the premium amount with the total loan amount.

Buying option

One can buy home loan insurance while taking the home loan. It is available with the financial institution from which you are availing the loan. In many cases it is bundled with the home loan.

Riders

Several home loan insurance providers also offer home loans insurance with optional rider plans. It will enhance the cover benefits of basic plans.

Riders like, terminal or critical illness, accidental death, unemployment and disability can be clubbed with home loan protection plans.

Home loan insurance can be purchased from a general insurance company of even a life insurance company. Usually those policies sold by general insurers have to be renewed every year. The ones that are offered by life insurance companies are on a longer basis.

A home loan insurance should not be bought perfunctorily or casually. Before settling for a particular insurance scheme one needs to satisfy oneself that it meets all the requirements of the individual.