Does Your Home Loan Protection Plan Really Protect your Family?

By SiliconIndia   |   Thursday, March 1, 2018
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In the current scenario, the easy availability of finance has made it easier to fulfil the dream of buying a house. However, while purchasing a house is a big achievement, it certainly entails a lot of responsibilities. What if something unfortunate happens to you, how your family would repay loan EMIs in your absence? 

A brief description of home loan protection plan

Home Loan Protection Plan acts as anassuranceto the lenders as the loan cover is combined with the loan amount. The borrower can either pay the initial premium himself, or he can get it funded from the lender. Usually, the Home Loan Protection Plan will gradually decrease with the repayment of the loan.Also, it only takes care of your one liability— home loan. But what about other expenses like children’s school fees, household expenses, credit card bills, etc.?

Therefore, it is essential to purchase term insurance that gives comprehensive coverage to your family. In addition to covering outstanding home loan, it also provides all the possible financial assistance to the dependants of the borrower’s in the event of his untimely demise.

Term Plan – A Thoughtful Option

While it is not compulsory to buy any kind of insurance if you already have a home loan, yet opting for a term plan is always a good idea. It comes as a welcome succour in the unfortunate demise of the borrower, where the family might have to face a severe financial crisis. At times, they might even have to give up the home altogether to pay off the loan. Thus,it’sbeneficial to safeguard the property and family members by investing in a term policy.If you plan small investment today for your family, it will get a big amount in the testing times. With this wise move, you will help your dear ones to feel your presence around, even in your unfortunate absence.

Benefits of Buying Term Policy

Numerous customised insurance plans are available in the market that will fit your needs perfectly. You can choose any of the suitableplans along with payment options; many of them cover huge benefits to spouse and family. For instance, with a term plan, the insured is always in a win-win situation. As these plans are best suited for one’s personalsituations or needs, it’seasy and prudent to have one.

Here are some of the key benefits of availing a term policy:

  • Term policies are more cost-competitive
  • Understanding a term policy and paying premium for the cover is easier
  • The entire amount of sum assured is paid to the beneficiary in case of the unfortunate death of the insured
  • Policy can be single or joint, according to needs
  • Tax benefits are always there as per Income Tax Act
  • It also covers critical illness like heart attack, cancer and lot more.
  • Term plan can offer considerable cover to ensure financial security of their family after their death

Indeed, term plans have always been the best choice along with home loans due to the flexibility and exclusive benefits they offer.

A term policy will make sure that your loved ones don’t face any odd phase in life even if you leave them early. As there are term insurance plans which also cover critical ailments, like cancer, heart attack, etc.; along with accidental disability, they are of great use. If you are always around them, even then the plan you purchased will take care of you and your entire family, which is not a possibility in the case of a Home Loan Protection Plan. Hence, buying a term plan would be a better decision immaterial of whether you already own a home loan.

To sum up, it is advisable to opt for a term policy that is suitable for your financial aspects and family needs. Whatever the situation be, this plan will prove as the best deal of your life along with your home loan. Just go for it!

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