Home Loan Insurance: Many people take a loan to build a house due to financial constraints, but they do not think it is right to take home loan insurance. Repayment of the home loan remains a big problem after taking home and building a house.
Especially for those people who do not have good earning resources. In such a situation, if there is only one earning person in a person’s house and dies in an accident, repaying the loan becomes a big burden for that family. They are afraid that their house may not be sold.
Home loan insurance is useful in such circumstances. If you do not know about it, read the article until the end. In this article, we will give you complete information about home loan insurance. In this article, we will tell you that a home loan is insurance. How to take advantage of home loan insurance.
Home Loan Insurance
Home Loan Insurance, also known as Home Loan Protection Plan (HLPP). This is such insurance. Suppose a person builds a house by taking a home loan. But the person dies before the loan amount is fully repaid. So after that, the home loan insurance company reimburses the remaining amount of the loan. Due to this, the deceased person’s family does not have to repay the loan, and there is no need to vacate the house. The tenure of the insurance is also equal to the loan tenure.
Types of Home Loan Insurance
- Reducing cover plan – The insurance cover decreases with the home loan amount.
- Level Cover Plan – Insurance cover remains the same throughout the loan tenure
- Hybrid cover plan – Full cover is available in the first year, later with the loan.
In-home insurance cover is available for theft of goods present in the house, loss due to natural calamities, etc. Apart from this, if something happens to the person repaying the loan. So in that, home loan insurance helps repay the remaining amount of the loan.
Difference between home insurance and home loan insurance
- Suppose you are building a house by taking a home loan. So whether you want to take home loan insurance with him or not is up to you. The home loan company cannot compel any person to take home loan insurance cover by letting him take it home.
- People often do not understand the difference between home insurance and home insurance. The purpose of both the covers is different.
- Home insurance covers damages to your home property due to natural calamities like earthquakes, storms, floods, fires, etc. Whereas home loan insurance
- Covers the loan taken by you to buy the property. This plan only covers the loan’s value from the time you take the loan.
Benefits of taking home loan insurance
- The person who built the house by taking a home loan dies. So the balance amount of the remaining loan gets deposited through the home loan insurance so that the victim’s family does not need to deposit the loan amount.
- After taking a home loan insurance cover, the burden of repaying the loan in difficult circumstances does not fall on others.
- Many banks add the premium amount of the insurance to the EMI. Due to this, the EMI does not increase very much.
- A home loan protection scheme is like term insurance, the tenure of which you can do on your own as long as you want to take advantage of it. Till that time only you will have to pay the premium for it.
- In case of a critical illness also, the victim gets the benefit of insurance cover. If the person taking the loan loses his job. So the next three EMIs are paid by the insurance company.
When will you not get the benefit?
Suppose you close the home loan prematurely. Or transfer in the name of another person. So in such a situation, your insurance cover will stop.
Even in case of natural death or suicide, the victim’s family will not get the benefit of home loan protection.
Where can I get loan insurance?
Whichever bank or non-banking financial company you take home from, the same company
also provides you the facility of home loan insurance. You can also take home loan insurance cover from the same company in such a situation.
How much is the premium to be paid?
Whatever home loan cover you take, you have to deposit a premium of 2% to 3% percent of the loan amount to get the home loan insurance cover. Insurance cover companies determine the insurance premium by looking at the loan amount, loan tenure, age, and income of the borrower.
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