Becoming a homeowner is perhaps one of the biggest aspirations of many. While it is not necessary to buy any insurance when securing a Home Loan, it is prudent to protect your family and dream home against uncertainty with the help of Term Insurance. A Home Loan is a key enabler for home buyers and a popular borrowing tool that helps you achieve your dream. However, your responsibilities do not end with buying a home; in fact, that is where it begins. A Home Loan is a long-term loan with tenure going up to 30 years. You can easily pay the Home Loan EMI when you have regular income but what happens when the income stops and you are the only breadwinner of the family. Buying Term Insurance for a Home Loan can help safeguard your family from the Home Loan debt.
Why Buy Term Insurance When You Have a Home Loan?
Term Insurance acts as the first line of defense for your family when you are not around. It provides the much-needed money to meet the obligations in the unfortunate event of the policyholder’s demise. A Term Insurance Plan ensures that your family is financially secured to pay off the debt left behind. Here are some of the key benefits of buying Term Insurance for a Home Loan that can help cover the Home Loan risks.
Higher coverage amount -
- A Term Insurance Plan can offer a large cover based on your requirements and financial risk profile. The total coverage amount should be at least 10 times the annual emoluments over and above the Home Loan outstanding amount.
Low premium cost -
- Low premium for Term Insurance Plans as compared to other Home Loan Protection Plans makes it a preferred option for individuals looking to buy Protection Plans.
Greater Flexibility -
- In addition to high coverage and low premium, a Term Insurance Plan allows you the flexibility to update your policy with the changing financial needs of your life. It allows you to change the premium, coverage, or tenure as per your changing requirements.
Add-on Covers -
- The additional riders that Term Insurance provides can benefit you to customize the plan as per your requirements. The add-on covers such as partial/permanent disability or terminal illness can be availed at a nominal additional premium.
Tax Benefits -
- One of the key advantages of purchasing a Term Insurance Plan is the tax benefits it provides. As per the Income Tax Act, 1961 you can claim a deduction up to INR 1.5 Lakhs annually on the premiums you have paid.
The dream of buying a home has become attainable for many with the help of a Home Loan. But it is prudent to consider the Home Loan risks and how a protection plan such as a term insurance plan can help shield your family in case of any eventualities. Term insurance allows you to insure your loan against health and life emergencies. So make a wise choice now to protect your family from the uncertainties of the future.