insurance for home loan or HLPP is it mandatory to buy or not | Home loan insurance is mostly known as HLPP
HOME LOAN PROTECTION PLAN
Do you really need a home loan protection plan?
Home loan
insurance is mostly known as HLPP(home loan protection plan)
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home loan insurance cover |
Nowadays
everyone wants to build their own dream home. But everyone did not have the
financial ability to build their home as they dreaming it and here Home loan
providers play a major role in their lives. These home loan providers basically
can be banks, NBFC's. Banks and NBFC’s mostly earn interest through these loans.
Hence, that’s the only reason they force people to buy such loans.
Coming to
the point the HLPP(home loan protection plan) it provides protection against
home loan liability or outstanding loan amount of borrower in case of untimely
death, so the family will not have to vacate the house. It's not as beneficial as
term insurance it only covers home loan liability plus it reducing the cover as
home loan amount reduces. So you will not get any kind of benefit after
completing the loan repayments the only advantage is its cheaper than the
term insurance that too if you opt for reducing cover if you go with fixed
cover it will be more expensive. While asking for a home loan from banks people need
to be extra conscious about HLPP, because banks club the HLPP along with home
loans and home loan insurance is not mandatory.
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home loan cover insurance |
For
instance, if the borrower borrows the home loan of 40 lakh. at 8.5% of the interest
rate for 20 yr. the EMI will be Rs.34,713. For reducing cover it will be
Rs.375 per month. And for fix cover Rs.800 per month. My suggestion is don’t go
for reducing cover because it decreases the value of the home lone cover insurance.
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insurance against home loan |
Tax benefits:-
You can get the tax benefits under section 80 C but these benefits are only applicable
when you pay a single premium or the bank give you a receipt for premium, in case
of EMI you will not get the tax benefit.
You can add additional
riders if you want. these additional riders are as given below.
·
- Accidental insurance
- critical illness cover insurance
- health insurance
In the case of
joint home loan HLPP will cover all the borrowers.
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