Your home is your biggest asset and responsibility. A home loan protection plan ensures that your family members continue to live in your family home, even if something unexpected were to happen to you.
Individuals purchase insurance plans for various needs – a term plan to offer financial stability to dependents on the demise of the policyholder, a two-wheeler/car insurance plan to protect the vehicle in an accident, health insurance to pay for medical needs and more.
What about your debts? Have you insured it?
Most people fail to insure a crucial aspect of their finances – their debts, especially large ticket items like home loans.
For most of us, a home is the biggest financial purchase in our life. Families save for years to pay for the down payment and then work hard to pay for the mortgage (home loan EMIs) every month.
Have you considered what would happen to your home loan, if you – the primary breadwinner – of the family pass away suddenly? Would your family be able to continue paying the home loan EMIs? Or would they be forced to move out of the dream family home and live elsewhere?
Losing a loved family member is not only emotionally draining but also financially taxing. Very often, most dependents have hard time meeting debts – like paying the home loan EMIs – after the loss of the breadwinner of the family. It places additional stress on the family, as they have to deal with the financial consequences and logistics of moving out of their dream home because they can no longer afford to pay the mortgage.
Secure your dream home, even after you’re gone, with a home loan protection life plan.
What is a home loan protection plan, and why do you need one?
It’s a traditional term plan that offers an added benefit. This plan is designed in a way to ensure that your family will be able to repay the outstanding home loan, in case of your sudden demise.
Just like a regular term plan, the home loan protection plan does not offer any maturity benefits. However, it provides a sum assured on the death of the policyholder during the tenure of the policy. The sum assured is equal to the total outstanding home loan amount, and it keeps on decreasing every year as you repay the home loan.
If the policyholder passes away, this plan pays the sum assured as a death benefit, which can be used by the dependents to cover the outstanding home loan balance.
Alternatively, you can,
Choose a Term Plan with Adequate Coverage to Protect your Mortgage
Another way to ensure that the home loan burden doesn’t fall on your dependents after your demise is by choosing a life insurance policy that offers high coverage. The lump-sum received as death benefit must be able to pay all the outstanding debts of your family, while also helping them maintain their current lifestyle.
Don’t let your Dependents fall into a Debt Trap
Irrespective of whether you choose a home loan protection plan or a term plan with adequate coverage, it’s essential that you consider your family’s outstanding debts while picking an insurance plan. Ideally, the death benefit offered must help your family pay off all outstanding loans while giving them a source of income to get back on their feet.
Choose the right life plan and protect your family from outstanding debts, even when you aren’t around.