05 MAY, 2021

Home loans are a great financing option for purchasing a property. However, repaying a home loan is a long-term liability, and hence, you must not overlook the importance of a Home Loan Protection Plan. Also known as Home Loan Insurance, the Home Loan Protection Plan is a scheme offered by various lenders, wherein the insurance provider settles the outstanding loan amount of the borrower in the event of his/her unfortunate death, disability or unemployment.

Some of the key benefits of availing a home loan protection plan are mentioned below:

Benefits of Home Loan Protection Plan

Peace of Mind

You won’t have to worry about loan repayment in your absence. By availing a home loan insurance, you can protect your loved ones from the burden of repaying the home loan. With us at Kotak Mahindra Bank, you can easily avail home financing as well as customized home loan insurance plans at attractive premiums.

Comprehensive Coverage

Certain medical conditions such as a critical illness or permanent disability can affect the borrower’s ability to earn. By opting for a comprehensive Home Loan Protection Plan, you can get an enhanced coverage that provides protection against such unfortunate incidents.

A Home Loan Insurance ensures that the borrower’s dependants don’t become homeless in his/her absence. However, it is to be noted that Home Loan Protection Plan does not provide coverage against suicide, death due to natural calamities or war.

There are typically two type of insurance cover, i.e. term insurance and home loan insurance

  • Term Insurance
    In a term insurance, the insurance provider will pay out a lump sum amount as a death benefit to the dependent or beneficiary, upon the demise of the insured. This lump sum amount can be used to pay off the outstanding loan amount.
  • Home Loan Insurance
    In a home loan insurance, the surviving family members of the borrower will be saved from the responsibility of settling the home loan in case of the borrower’s demise during the loan tenure.

Flexibility in Premium Payment

Borrowers have the flexibility to either pay the premium in one go, or the insurance amount can be adjusted in the total loan amount and can be paid on an annual basis. Moreover, borrowers also get the option of converting insurance premium into amount that can be added to the home loan EMIs.

Single Insurance Plan Needed

Even if you happen to avail a joint home loan, a single home loan insurance will cover all the borrowers.

Now that you have a fair understanding of the various benefits of Home Loan Protection Plan, ensure to make the most of it to safeguard the future of your near and dear ones. Since the insurance company will settle the home loan in case of any mishap, your family members won’t have to bear the heavy debt burden. We, at Kotak Mahindra Bank, offer home loan insurance at a competitive premium. You can consider availing both home loan as well as the Home Loan Protection Plan with us. However, do not forget to read and understand the terms and conditions of your home loan agreement carefully before signing it.

Read More:What is Home Loan Insurance and why is it important?

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.