Buying a house always holds emotional and financial importance for the buyer. With the growth of the real estate sector at a rapid pace, it is considered to be a worthy investment.
The ever rising cost of property requires opting for a home loan with big EMIs. When going for a home loan, your lender will also advise you to protect the loan with an insurance cover.
Home loan insurance is a plan that covers your outstanding loan amount. It has double benefits for the lender and the borrower’s family.
If the borrower fails to repay the loan due to death, the family need not worry about repayment and the lender gets his funds back under this cover.
With every passing year of loan repayment, the insurance cover diminishes.
The bank offering the home loan may offer a standard insurance policy, but you can also opt for an independent plan that meets your requirements better.
Insurance companies provide various schemes for home loans.
By paying an additional premium, you can avail some unique features, like coverage for critical illnesses, disability, and for accessories inside the home.
Read the terms thoroughly
One should always go into the details and read the documents properly. Believing the lender, you agree to buy the insurance policy without reading and understanding the terms and conditions properly.
When there’s a need, the conditions in the fine print may come as a surprise.
Some policies cover you for death due to certain specified illnesses only. If the cause of death is not mentioned in the list, your loan will not be repaid.
You should always be careful and cautious while choosing an insurance provider and a policy. You should research properly and then only come to a decision.
You are not bound to act on the suggestions of your lending bank and opt for a policy or insurer.
You can go for any policy with a pocket-friendly premium and from an insurer you trust. Many malpractices occur in home loan insurances as well to save the insurance amount payout.
Therefore, it is advisable to follow every rule and term in the policy document for your benefit, even if it requires a health check-up.
Home loan insurance plans are broadly single-premium policies. There is an option to pay the single premium as a part of your EMIs. However, as per your convenience, you may opt for a regular premium payment or limited premium payment.
The right to ask
Buying home loan insurance is not mandatory, but it is of utmost importance. You have every right to reject the policy and the right to ask questions.
If you are not satisfied or happy with the policy offered to you, you can always ask for a detailed explanation from the officer.
In case you have bought the policy and do not find it suitable after reading the policy document, return it within the free-look period of 15 days.
Ultimately, home loan insurance is a financial investment and you must tread carefully and take every needed precaution to find a suitable cover for your home loan.
Curated from How to Insure Your Home Loan with the Right Cover