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26 DECEMBER, 2022
What is Home Loan Insurance?
Home loan insurance policy is offered by banks to cover the borrower and ensure the home loan repayment. A home loan insurance policy is important for both borrowers and lenders as it protects the interest of both parties. Home loan insurance in case of death will allow banks to recover the outstanding amount from the insurer. Home loan insurance benefits borrowers when it comes to securing the future of their family and protecting them from sudden financial problems.
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 insurance policy. Also known as housing loan insurance plan, the home loan protection insurance 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.
Benefits of Home Loan Protection Plan
Peace of Mind
You won’t have to worry about loan repayment in your absence with home loan protection insurance. By availing a home loan insurance plan, 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.
Certain medical conditions such as a critical illness or permanent disability can affect the borrower’s ability to earn. By opting for a home loan protection insurance, you can get an enhanced coverage that provides protection against such unfortunate incidents.
A hoam 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 insurance cover does not provide coverage against suicide, or death due to natural calamities or war.
Importance Of Home Loan Insurance In India
Housing loan insurance plan is important for several reasons. It protects not only the lender but the borrower and their family too. Home loan insurance in case of death helps repay the remaining amount of the home loan thus keeping the banks from facing any losses and helping the family by not putting undue financial pressure on them. To enjoy loan insurance benefits we highly recommend getting it.
Claim Process For Home Loan Insurance
Home loan insurance in case of death has a simple process. The family of the deceased borrower needs to file the claim to reap the loan insurance benefits. The insurance company pays the amount to either the borrower’s family or directly to the lender. In case the borrower remains alive after the term of the policy, the home loan insurance premium they have paid will not be paid back to them. With this easy claim process for home loan insurance the distressed family can obtain funds quickly and get rid of any financial troubles.
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There are typically two type of insurance cover, i.e. term insurance and home loan insurance
Term Insurance for home loan
In term insurance for home loan, 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. Term Insurance for home loan must be taken as the nature of lives is very unpredictable.
Home Loan Insurance
In home loan insurance cover, 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 home loan insurance 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 of a joint home loan, a single hoam loan insurance will cover all the borrowers. All these home loan insurance benefits can be enjoyed by you once you avail of a life insurance for home loan at Kotak Mahindra Bank. The home loan insurance cost is affordable and it will protect your family even after your death.
Now that you have a fair understanding of the various home loan insurance benefits, and know the claim process for home loan insurance, 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. Home loan insurance cost at Kotak Mahindra Bank is extremely affordable. You can consider availing both home loan as well as the life insurance for home loan with us. However, do not forget to read and understand the terms and conditions of your home loan agreement carefully before signing it.
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