Why Should You Buy Home Loan Protection Plan Along With Home Loan?

The Home Loan Payment

Death is one sad event that is very unfortunate in life for you as well as for your family, and it can become even worse if you are the only breadwinner in the family. In such a sad event, the payment/EMI of the loan amount is transferred to the borrower's dependents. In the event of the buyer's death, the family is obligated to pay off the outstanding house loan in order to keep the property; otherwise, the bank may liquidate the property to recoup the debt.

What Experts Advise?

A protection plan is usually recommended when taking out a house loan, so that, in the event of an unforeseen event, the individual or his or her family will be able to repay the debt. The nominee will receive the cover amount as funds from the Term insurance or loan protection plan in the event of an unexpected event such as the death of the buyer of the residential property. This money can then be utilized to pay off the outstanding debt and keep possession of the property. Home loan insurance provides you and your family much-needed peace of mind by safeguarding them from unforeseen events. 

Why should you buy Home Loan Protection Plan?

Home loans might last anywhere from 25 to 30 years or longer. One thing to clear, when taking out a house loan, home loan insurance is not mandatory. However, as a method of safeguarding your income and valuables, such insurance becomes necessary for the borrower. 

We all know that there are no guarantees in life and the loan can last for a long time as said above. In unfortunate events, such as death, and the outstanding loan amount is not paid, an item that is valuable to the family or that may be utilized in times of need may be confiscated. As a result, in instances like these, you must plan ahead of time to safeguard your family and loved ones. Term insurance is comparable to home loan insurance. 

This insurance covers you for the duration of your loan repayment. The insurance period ends when the outstanding loan balance is paid. However, if the person who is paying the loan dies during the loan term, the family can use the loan insurance to pay off the outstanding house loan balance. This makes it a must-have reason for Home Loan Protection. Further, this prevents the bank from seizing the house or other assets used as security.

Things You Should Know

As an insurance buyer, you must remember to conduct your research before selecting this choice. Financial organizations may try to sell you insurance to make money, but you must purchase the policy that best meets your needs. You also don't have to acquire insurance right away if you're taking out a loan. You can purchase insurance afterward through another financial institution, bank, or insurance-selling portal.