HOME LOAN PROTECTION
AT THE TIME of taking a home loan, most banks insist on a mortgage insurance, which covers the loan amount in case the borrower dies before clearing the loan. One must evaluate the pros and cons before taking such a policy as it is more expensive than a pure term plan and cannot be ported to another lender in case of loan balance transfer.
A mortgage insurance plan or home loan protection plan is a single premium product and the sum assured is linked to the loan amount. While it is not mandatory to take this policy when availing a home loan, the bank may urge one to buy it due to its financial interest in the property and life of the borrower.
The premium amount is bundled with the loan amount, adjusted with the equated monthly installments and the policyholder even pays interest on the borrowed premium amount. The sum assured decreases along with the outstanding loan amount and the overall coverage reduces as the loan tenure comes down.
Unlike a term insurance plan, a mortgage insurance plan is an agreement between the bank and the insurer and the latter settles the outstanding loan on behalf of the policyholder in case of death. The plans offer joint life cover for co-borrowers and there is no maturity benefit.
Term plan a better option
Bu hikaye Financial Express Mumbai dergisinin August 28, 2023 sayısından alınmıştır.
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Bu hikaye Financial Express Mumbai dergisinin August 28, 2023 sayısından alınmıştır.
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