What is Home Loan?
Home Loan Insurance also called home loan Protection Plan (HLPP) is a scheme offered by almost every financial organization in which the insurer will settle the outstanding or balance home loan amount of the borrower with the lender or bank if there is a situation of unforeseen circumstances that may include the demise of the borrower or the owner of Villa Plots for sale in Chennai.
Home Loan Protection Plan (HLPP) or home loan Insurance in simple terms is called an insurance plan. Under which insurer settles the balance amount of home loan with banks, NBFCs or housing finance companies, just in case of death of the borrower. The policy term is typically identical because of the loan tenure. By availing of Home Loan Insurance the borrower is relieved that even after his/her demise, his/her family will not be asked to repay the home loan or vacate the home because of non-payment of the loan amount.
Aspects To Be Considered Before Opting A home loan Insurance for Villa Plots for sale in Chennai
The ways that you’ll favour to insure the house loan are mentioned below
Term insurance – It’s purchased so that all your liabilities and debts are taken care of.
Separate home insurance – This insurance scheme only takes care of your home loan outstanding when you are unable to pay it off.
Most of the house loan insurance schemes offer reducing coverage with them. The size of the coverage is linked to the house loan outstanding. Thus, the sum insured goes down when a private repay the loan amount. However, in the case of term insurance, coverage stays the same.
Home loan insurance can be purchased either from a general insurance firm or a life insurance company. The ones that are offered by the overall insurance companies got to be renewed on an annual basis. The policies offered by insurance companies are for longer terms.
It is of utmost importance that you simply ask about the riders and add-on covers. It is beneficial to urge an idea that covers situations like unemployment and disability, along with side death. Also, check if the policy covers just natural demise or accidental demise too.
The loan tenure and insurance cover period must match. It is not advisable to choose a shorter cover period thinking that you simply will extend it later. There lies a really strong chance that you might forget to increase in the long run. Also, as you grow older, it only becomes difficult for you to get good coverage. Even if you get one, it will be pretty expensive for Gated community plots in Chennai.
Features and Benefits of Home Loan Insurance
- Home Loan Insurance provides a lump sum amount of benefit that can be used further to repay the outstanding home loan on Villa Plots for sale in Chennai.
- The policy could lapse in case of a home equity loan balance transfer, home equity loan restructuring or full repayment of the loan amount.
- A lump-sum amount is paid to the beneficiary of the home loan or policyholder.
- Under Section 80C & 80D, the borrower gets the tax benefit from the Land promoters in Chennai.
- Under a joint loan, single home equity credit insurance can cover all the borrowers.
- Some extra premium for medical conditions like disability and critical illness can also be covered in the home loan insurance plan.
- The borrower has the flexibility to repay the premium which is a single/whole payment premium or insurance amount that can be adjusted in the total loan amount and can be paid on an annual basis.
- Borrowers have the choice of converting premium into the amount that can be added to the house loan EMIs.
- Home Loan Insurance provides coverage of certain medical illnesses, including cancer and heart failure and many more.
- Home Loan Insurance doesn’t cover suicide or death because of natural calamities or war.