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What is Home Loan Insurance and why is it important?
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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.
Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.
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Human life is unpredictable. Though the uncertainty in life leads to delightful surprises, it sometimes brings unwanted troubles. Home loan borrowers always worry about who will repay the home loan amount if anything unexpected happens to them over time. The borrowers never want their financial liabilities to cause stress to their loved ones in case of their untimely demise. This is the reason why home loan insurance is becoming popular among loan borrowers.
Home loan applications get quick approvals these days once the banks confirm the authenticity of the documents and find out that the credit score of the applicant is good. Furthermore, financial institutions advise borrowers to purchase home loan insurance after completing home loan documentation. However, buying a home loan insurance is not compulsory.
What Is Home Loan Insurance?
They are also known as Home Loan Protection Plan (HLPP), it is an insurance plan under which the insurer covers the outstanding home loan amount with the lender in case of the untimely demise of the borrower. The term of the home loan insurance is generally equal to the tenure of the loan.
Neither the bank nor any other financial institution has the right to mandate buying insurance for a home loan. Moreover, none of the regulatory bodies has made buying a home loan insurance compulsory to home loan buyers. Getting a home loan insurance is solely a choice of the borrower.
What Are The Different Types Of Home Loan Insurance
There are three types of home loan insurance,
Which Factors Influence The Premium Of Home Loan Insurance?
The following three factors influence the premium on home loan insurance,
Why Buying A Home Loan Insurance Is A Wise Decision?
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