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Home loan insurance is a type of insurance that the lender offers to cover your outstanding home loan amount, in case you die or become permanently disabled. This insurance will ensure that your family does not have to suffer financially due to an unfortunate event. There are several benefits of having a Home Loan Insurance policy, as mentioned below:
Protection for the family
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You can protect your family assets.
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You can protect your family livelihood.
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You can protect the future of your family.
Home Loan Insurance: Should you get one?
Home loan insurance is a kind of life insurance policy that protects your home loan from becoming due in case you pass away. The idea is to make sure that your loved ones dont bear the burden of repaying off the loan in case something unexpected happens to you.
There are a few benefits to getting home loan insurance, while there are also some cons associated with it as well. Home Loan Insurance: Should you get one? Well discuss both here!
Tax benefit
The tax benefit of home loan insurance is as follows:
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The interest paid on your home loan can be claimed as a deduction from your taxable income.
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You can claim the premium paid to buy Home Loan Insurance as a deduction from your taxable income in the year that you pay it.
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In case of death or permanent disability, the outstanding balance of your home loan will be paid by the insurer directly to your bank or financial institution. As a result, there is no need for you to make any repayment yourself.
Given below are some examples to help understand how this works:
You have taken a housing loan worth Rs 1 lakh at an interest rate of 10% p.a., payable every month over 20 years, with tenure running until 25th December 2024 (i.e., 30 years). Your monthly installment comes to Rs 8500/- which includes principal repayment and interest payment at 10% p.a. If you opt for HDFCs Home Loan Insurance policy worth Rs 30 lakhs at 0% premium charged upfront (i), then on maturity date i) when HDFC pays off all outstanding dues on behalf of its policyholder (that is now deceased); ii) the amount received by his/her nominee after deducting eligible expenses such as legal fees, etc.; iii) the amount received by nominee after deducting eligib le expenses such as legal fees, etc.). In addition to these benefits, there are also other ways in which one can get tax benefits while purchasing HDFCs Home Loan Insurance Policy:
Improve the quality of life
Home loan insurance is a type of insurance that covers the borrower against the risk of default in the payment of the loan. It is a type of insurance that covers the borrower against the risk of default in the payment of the loan. This can be done by paying monthly installments to some other person or organization, typically an employer, government agency, or other institution.
The primary benefit of this kind is that it reduces your monthly payments and allows you to take advantage of lower interest rates on your mortgage without having to buy an expensive house if your credit score isnt very good yet.
benefits of home loan insurance
Home loan insurance protects the family and the home. Home loan insurance can be used to buy a new house or refinance an existing mortgage. It provides protection against death, disability, or dismemberment if you are unable to work for any reason. This can happen due to natural disasters like floods, earthquakes and fires, etc or manmade disasters like terrorist attacks, etc
If you have taken a home loan from any bank or financial institution then this is one of the best ways in which you can take care of your family in case something unfortunate happens to you by protecting them financially as well as emotionally - because they will be able to continue paying off your mortgage without having too much stress on themselves.
Importance of home loan insurance
Home loan insurance is a must for all those who have a home loan. Home loan insurance protects your home loan and makes sure that in case you are unable to pay back the loan, all dues are cleared off by the insurance company.
You can get a home loan insurance policy from any bank. The premium of the policy depends on various factors such as the amount of your home loan, age, health issues, etc., but it doesn’t cost much as compared to its benefits.
Conclusion
The insurance policy will not only help you in managing your home loan but would also benefit your family in case of any eventuality thereby providing them with financial security. It is very important to ensure that the policy covers all contingencies that might arise so as to provide complete protection for the family and peace of mind for you.