Insure Your Home Loan with Home Loan Insurance |
Posted: April 17, 2019 |
What is a home loan insurance plan?Home loan insurance even known as mortgage insurance has become extremely important and well-liked in present day economy due to the ever-increasing prices of properties in India. Life is unpredictable, and so is our financial status. It is an excellent choice to secure your future as well as to provide financial stability to your loved ones with the help of home loan insurance. To know how it benefits us, we must know what home loan insurance is. According to a home loan insurance plan, the insurer needs to settle the outstanding Home Loan amount taken from the lender or the bank in case of an unfortunate event. Some of the all-inclusive kind of home loan insurance plans provides insurance cover for the applicant, the house, and all the contents of the house. The premium to be paid for home loan insurance is eligible for tax benefits. State the importance of home loan insurance for borrowers?Lenders would never want their loans to turn into bad debts. They would like to protect their money by taking home loan insurance. In case of borrower’s demise, the lender will lose all the money which is given as a loan to the borrower, if the borrower was the only breadwinner of the family. We are now aware that, home loan insurance plan covers the due amount of the home loan in an event where the borrower is unable to pay his/her debts. The situation can arise due to the instability of borrower’s job or his/her demise. You have an option to go for a regular plan or to opt for an insurance plan that offers additional features along with more enhanced coverage. Home loan insurance is essential for the loan borrowers as it gives the sense of security that the dependents will not become homeless or financially drained in case something happens to the borrower, unfortunately. Points to be considered before opting home loan insurance:
Home loan insurance schemes generally come with reducing coverage with them. The amount of the coverage is set based on the outstanding home loan. Therefore, the total amount of insurance reduces when the borrower repays the loan amount. On the other hand, in term insurance, coverage remains the same. The sum assured is taken by the nominee who can settle the payments to the lender for the outstanding loan. Home loan insurance can either be purchased from any general insurance company or from a life insurance company. The policy offered by the general insurance companies needs to be renewed yearly whereas life insurance companies offer plans for longer terms. It is essential to know about the riders and add-on covers before finalizing any home loan insurance policy. It is useful to go for a plan that offers coverage for events like unemployment or disability, along with demise. Also, you must check whether the policy covers just natural death or accidental demise too. You should also keep an eye on the loan tenure and coverage period of insurance. It is advisable to go for more extended duration plans and for a shorter one with a mindset that you will extend it later. As you may forget it later, and also it becomes difficult to get good coverage as you grow old. Even if you get it, it will be very expensive. Be very sure, that your insurance scheme is up to mark with all your requirements. Compare various policies that are available in the market to opt for the best one. Be sorted with your expenses as the premium payments along with loan EMI, needs to be paid on time. How is cost calculation done for home loan insurance?A home loan insurance cost calculator is to determine how much coverage you should go for when you are looking to ensure your home. This helps in finding out the right plan and the amount of coverage you need to protect the house and its contents from perils like hail, fire, and other man-made damages. The amount of coverage is calculated based on the area, the approximate cost of the contents, the value of the building and other such related factors. When you talk about the assets that you own, home tops your list. Not because of the price as it is the costliest asset but because of the emotions attached to this shelter that protect your family. To guard your most valuable asset, you should go for a comprehensive home insurance policy especially the one that covers your house and all its contents. What are the features of the home loan protection plans?
Define parameters of home loan insurance plan? The insurance coverage cost is determined based on the following parameters. Plan Type The coverage will depend on the type of plan that you opt whether you are ensuring only the building or the belongings as well. If you go for only building plan, the price of the home structure will be taken into account. For belongings, the cost of personal things and jewelry will be taken into account. For a comprehensive plan that covers both contents and building, the cost of both adds up. Value of the Building The value of the building is calculated based on its reconstruction cost and not the current market value of the property. The insurance coverage should sufficiently recompense for the reconstruction cost. To analyze the building value, the built-up area of the building and the construction rate per square feet is multiplied. For instance, if the built-up area of the home is 1200 sq.ft and the total cost of construction is Rs.1, 500 per sq.ft, the sum insured will be Rs.18, 00,000. Value of belongings and Jewelry You must specify the value of contents and jewelry to analyze home insurance coverage costs accurately. When it’s about a home loan, read here how to increase your home loan eligibility?
|
||||||||||||||||||
|