Is it Compulsory to take Insurance on a Home Loan in India?
Taking an insurance policy on a Home Loan is not a compulsion, however if there’s an emergency and the borrower is not present or able to pay the EMIs, the insurance policy comes to the rescue. So it’ll act as a cover you and your family through thick and thin. But there’re certain things that you need to be aware of if you want to insure your Home Loan.
Financiers like Bajaj Finserv offer a Home Loan with refinance facility, nil foreclosure charges, and part prepayment facility.
Insurance Cover for Home Loan
The most important thing that you need to be familiar with is the premium of the Home Loan insurance. There are certain factors which determine the premium amount such as the age of the insured, the loan tenure, the amount of loan, and medical history etc. If the repayment period is more, your premium will be more as well. The premium also depends on whether the insured has any terminal or serious illness. And finally, the greater the amount of your loan, greater will be the premium.
How to buy an Insurance for Home Loan
Usually, the lender will provide you with the appropriate insurance policy that suits your requirements. But, you also need to look out for certain important factors while considering a Home Loan insurance policy. The most important thing to check is whether the policy will offer death benefit or death by accident. Make sure the policy has a permanent disability benefit or not. This will ensure your family does not face any problems later. Also, you need to know how the benefits of the policy can be claimed beforehand.
Rate of Interest on Home Loans
In the present day, commodity prices have hiked up drastically and also affected the Home Loan interest rates in India. Since the interest rate is also a factor in deciding the premium for insurance cover, you need to take that into consideration. Bajaj Finserv offers Home Loans at lowest interest rates.
Ideally, you should always take an insurance cover for the Home Loan you are acquiring. This not only keeps you secure during times when you are low on cash but also ensures that you are not fined for non-payment of EMIs. Take your time, analyse the various factors involved and choose an insurance policy that works for you.