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)

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.  

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.

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.