Bangalore: Everyone wants an insurance cover for their hosing loans as the real estate prices and high interest rates as well as the housing loan EMIs are no longer self-effacing anymore. Suresh Sadagopan, a Certified Financial Planner and Founder Ladder 7 Financial Advisories said, “If something happens to the main borrower and the family can't afford to pay the EMIs, they can be evicted from the house” (as quoted by Economic Times).

He adds, “Also with spiraling real estate prices coupled with a huge loan amount, it's in best interest of the borrower to take an insurance cover against the loan.” There are two ways in which one can cover a home loan, one is through a home loan protection plan (HLPP) and the other is the pure term cover. Most of the financial advisors often recommend term cover instead of HLPP to cover the housing loan.

Pankaj Mathpal, Certified Financial Planner and Managing Director of Optima Money Managers, “HLPP, often sold along with the housing loan, offers a risk cover (sum assured) equal to the loan amount. As the outstanding loan amount reduces, the size of the cover also reduces.” The 20 year housing loan of 50 lakh at 9.5 percent so the home loan protection plan will cost around 1, 72, 650, it is a single premium policy. The outstanding loan amount of the borrower would be over 41 lakh by December 2017.