Learn about home loan insurance - By: Habibulla

Buying home is one of the most important decision that you will make in your life. Most of Indian peoples buy homes by taking a home loan from one of the lenders. The increasing risk is here to repay the loan amount in a specific period of time.

In case something happens to you, the loan amount will remain to paid back through your regular EMI installments. The burden of outstanding loan amount will spread on your family members, If your family member fails to repay the loan amount, the lender can make possession on your home. This is why, strongly recommend to take a insurance on your home loan.

Home loam insurance ensures sum of money towards repayments of your home loan, in the event of your death, disability or loss of income. This plan works like any other life insurance plan, except that the life cover will be equivalent to the outstanding loan amount as per your loan repayment schedule.

Home loan insurance premium varies based on the age of the borrower, loan amount and tenure. The minimum age is to get this plan is 18 years and maximum age is 50 years of age with clearance of necessary medical examination. The premium rates are very lowered compared to any other individual insurance plan, but premium increases for the upper age.

Additionally, home insurance comes under the category of life insurance, so you can claim for tax deduction under section 80C of the Income Tax Act,1961. You can lose the benefit, in case your insurance premium in clubbed with your EMI's you pay on your loan.

This insurance is pure risk cover plan that are available from various leading insurance companies. Today, most of loan providers offers to take a cover on outstanding loan amount at applicable rates.

About the Author

Habibulla Antule is a financial advisor and consultant and have provided his expertise to many financial institutions for loans and insurance

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