Home Loan insurance is not mandatory by law, RBI or IRDA but it is advisable.Loan protection insurance, or loan payment protection insurance, is a form of payment protection insurance. This type of insurance can help you protect your monthly loan payments if you become unemployed or suffer an accident or sickness.
BENEFITS OF HOME LOAN INSURANCE:-
In case of unfortunate demise of the loan borrower during the tenure of loan, the insurance company settles the loan amount with the lender, so the borrower doesn’t take over the property.The excess amount is paid to the beneficiary of the policy holder.
If the borrower losses their job and couldn’t pay their EMI.
You get tax benefits under Section 80C.
You can opt for other riders such as critical illness or disability rider. Such riders will increase the premium amount though.
THINGS TO KEEP IN MIND:-
Loan insurance is something that you need to give careful thought to:
Insurance cover type: Whether it cover death by accident or death by any cause/cover temporary disability only/it cover permanent disability also.
Eligibility: Check out the eligibility criteria for the insurance. Check whether the loan needs to be of a certain amount.
Payment of premium: Check whether you can pay the premium as part of the EMI or does it have to be made as a lump sum amount.
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