Do You Have A Home Loan? Know Why Term Insurance Is Right For You

Although it is not required to purchase any type of insurance when obtaining a home loan, it is prudent to purchase a term plan for the home loan in the event of the policyholder's untimely death, as their family members may face serious financial hardship and may be forced to sell the home in order to pay off the debt. This is why it is critical to protect one's property and loved ones by investing in a term insurance plan for home loan protection in order to protect against such disasters.

Understand Why Term Insurance Is Beneficial To You

An ideal term plan for a house loan is one in which the sum assured is equal to 10 times the annual income plus the amount of the loan to be paid. The following are some of the reasons why you should buy term insurance:

• Term Insurance Is Affordably Priced

Term insurance for house loan protection may be required by the loan provider throughout the process of obtaining a home loan to protect the investment, with the insurance firms settling any outstanding amounts owing to the lender. You may instead choose a term insurance policy, which is significantly more helpful than a home loan protection plan or house loan insurance because it is not required. You may also research different term plans and choose one at a price that is accessible to you. In addition, if the policyholder chooses an online term plan, they will be eligible for further reductions.

• With a Term Plan, you may Easily Switch Lenders

When it comes to a house loan term plan, you may easily transfer your existing home loan from one lender to another without having to pay an insurance cost. Furthermore, even after you've paid off the loan, you and your loved ones can continue to benefit from term insurance's life insurance coverage by paying the payments, or you can opt-out if you wish.

• Benefits are Fixed in Term Plans

The nominee receives the whole amount regardless of when the claim is submitted, which is a big benefit of term insurance for home loan protection. The money can then be used to pay off the house loan lender, with the leftover funds going to the nominee.

• The Insurance Coverage Remains the Same

When it comes to a term plan, not only does the amount cover the outstanding house loan, but the balance amount may also be used to cover other financial obligations of the borrower's family in the case of the borrower's unexpected death. The sum guaranteed remains constant, giving the policyholder additional options because it isn't tied to the secured home loan. If one must instead choose a home loan protection plan, the amount of insurance supplied decreases as the debt is repaid. As a result, when it's time to file a claim, the nominee gets the outstanding loan amount. As a result, term insurance is a better choice.

Take Away

Secure your family's ambition of owning a home by purchasing a term plan that protects them from the obligations of home loan EMIs. Purchasing term insurance is a prudent decision you can make right now to safeguard your loved ones from the unknowns of the future. As a result, investors should compare the cost of term insurance plans offered by banks with the cost of premiums available online.

Also read-Should I Buy A Term Plan Or An Endowment Policy?

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Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.