Home Loan EMI Insurance Cover
A must for all Loan applicants
Home Loan EMI Insurance is a must for all housing loan borrowers. Taking a Home loan is not a big thing, but ensuring it is good to work. Many think that insurance cover for a home loan is not required. Your home purchased through a housing loan is not yours until you clear the dues.
Why Home Loan EMI Insurance is required?
Insuring your Home loan or any other loan EMI is very essential. God forbid something happens to the applicant, the family should not suffer. In case, any problem arises, the family member has to clear the loan fully otherwise the property would be taken over by the Loan Company.
Home Loan EM Calculator – How does it work?
For example, you may be purchasing a home for Rs. 50,00,000/-, with a monthly loan EMI of approx. Rs. 44,000/- for 20 years. That means you are paying approx. Rs. 44000 x 12 = 5,28,000/- to be paid for 20 years which comes to Rs. 1,05,60, 000/- . The Home loan applicant is going to pay to double his loan in EMIs.
How to buy Home Loan Insurance?
Many people forget to buy insurance cover for Loan EMI. It is very risky to have a huge loan without insurance cover for the home loan with interest. Home Loan EMI Insurance is a must because your family can live in the same house even after anything happens to you.
Some Home loan companies add Insurance cover also while disbursing loan amounts. That would increase the EMI, which is not good. Be careful while signing the housing loan papers. Outside, you can have more coverage for less premium with more benefits.
Home loan Insurance should be purchased separately from the best claim settlement company with all benefits. Many people stop paying for the insurance coverage once the loan is cleared. It is not good. Having life insurance coverage is always good. In case not able to pay the premium, then it is ok, otherwise, continue till it is required.
The basic things to know for loan insurance cover.
- Premium
- Whether the premium would be the same for the next 20 years?
- Why the premium is so cheap?
- Disability is covered?
- Double Accident benefit is included?
- Medical tests required?
- Lose of life due to Natural calamities is covered without extra premium?
- Lose of life due to a terrorist attack is covered?
- Exclusions
- Claim ratio
- Claim settlement procedure
- Any Claim settlement in the past?
Insuring under Home Loan EMI Insurance is very easy and sometimes paperless. But after signing the papers, you cannot see or even get a call for collection premium in many cases. In those cases, your Home Loan EMI Insurance will lapse.
Home loan insurance is a pure term insurance plan and can be discontinued once loans are cleared. There would be no compulsion to continue the Insurance cover after the loan is cleared. If the Policyholder wants to continue, he may continue till maturity. No Maturity amount would be payable after the premium paying term is over.
How to buy Insurance coverage for loan EMI?
Proper planning has to be done for Loan insurance coverage. Many things to be considered before buying the cover.
Applicant’s age, loan amount, earnings, dependents, loan EMI amount, total interest to be paid, Insurance premium amount etc., has to be considered before arriving at the coverage value.
An experienced Advisor can help the applicant to arrive at a decent cover which would help his family also financially in case of any eventuality.