Skip to main content

Insurance Planning: Cover for Home Loan

 

   Home loan repayments form a substantial chunk of most borrowers' monthly income. Vishal is one of those borrowers who are walking on a tight rope budget. With a high interest personal loan and credit card debt also adding to his burden, Vishal is under stress. He is constantly afraid of losing his job and unsure of meeting medical emergency bills of his family.


   Some insurance products are structured keeping in mind home loan borrowers like Vishal. Some term products cover the sum insured subject to a maximum liability for a time period of say five years for illness, death of insured person etc.


   Most insurance companies compensate for loss of employment on account of retrenchment or layoffs. This is applicable for salaried employees only and the maximum liability of the company is three EMIs. So, the borrower can look for another assignment without worrying about raising money to repay the home loan dues for this time period.


   You can insure your house against damages from fire and other perils. Here, losses to the structure of the house and contents due to natural or man-made calamities are usually covered. Fire, earthquake, lightning, flood etc may be covered. On the contrary, there are exclusions to the cover that all borrowers must be aware of. They could include willful destruction of property, and wear and tear. Loss of valuables due to burglary is also covered under some products.


   Read the elements covered, and understand the limitations and exclusions of the policy. Compare products offered by different companies and settle for the one that suits your specific requirements.


   Self-employed people may not be eligible for cover against loss of employment. One is required to provide accurate details of his health condition. Usually, if a borrower has a pre-existing health condition, it will be excluded from the cover. Most products are usually given to individuals above 20 years and below 50 years of age.


   The premium charged depends on the age of the applicant, loan amount, loan tenure, occupation, medical history and sum insured.


   Home insurance policy covers the structure and contents of your home from natural and man-made calamities. Assess your insurance needs first.


   It is prudent for home loan borrowers like Vishal to start working on a contingency fund. Too many debts can push a borrower into a deep financial crisis. A contingency fund can be of extreme value in case of medical emergency or loss of job. Even if it is small money, start setting aside this amount month after month.

 

Popular posts from this blog

Group Health Insurance

Buy Group Health Insurance Online   For Human Resources, the biggest challenge today is to decide whether medical benefits should be offered to employees or not, what type of plans should be offered, what will be the cost and how will the cost be split between employees and employer. Well, most of these are subjective and would depend on a lot of factors including company size, average employee salary, etc. However, this article will give you a fair idea on how you should go about deciding these factors: 1. Why offer group health insurance benefit to employees : Studies have proved that retention rates among employers offering GHI are much higher than the ones who are not offering. Moreover, the cost of providing this benefit as a percentage of salary is very low as compared to the perceived value. As an example, say if average salary of an employee in your organization is 4 LPA. If you decide to offer a health insurance benefit to him for a Sum insured of ...

ICICI Prudential Dynamic Plan Invest Online

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   ICICI Prudential Dynamic Plan             Invest Online This fund does remarkably well during falling markets, but fails to show the same prowess during a rising market. The fund sticks to its mandate to adapt to the dynamic nature of the market by shuttling between debt and equity. It takes aggressive asset calls in equity when the market surges by investing in quality mid-cap stocks. At the same time, it adopts a defensive strategy by investing in debt and cash when markets get overvalued, making it a good long-term choice.     For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call     Leave a missed Call on 94 8300 8300   Leave your comment with mail ID and we will ...

Lump Sum or SIP?

Invest Mutual Fund Online     You have a lump sum in hand and you wish to invest in equity funds. However, you have heard a lot of talk about investing in equity funds through Systematic Investment Plans (SIPs) because they help average costs, ensure you do not ill-time the market, and help you invest in small sums, besides giving you many other advantages. So, should you invest the money you have in hand in one go, or let it remain in your bank account and then do an SIP? There is no harm in investing a lump sum amount. For all you know, compounding, over the long term, could work better with lump sum. However, make sure you fulfill all of these three criteria if you want to invest in one go. Else, SIP is the way to go. #1: You invest for the long term According to past data, ideally, if you have a time frame of 12 years or more, you can consider lump sum investing (provided you satisfy the other two conditions that follow). So, what is the sanctity behind 12 years? Is it because only...

Why credit history is critical?

Will you need a loan to buy a car or a house? Do you know why some people get their loans sanctioned quickly without any hassle, whereas others find that their approval is delayed or their application is rejected? If you want a loan, you will need to work to build a solid credit history because this can have a bearing on the ease with which you get loans. Read on to learn more about what is a credit history and how to build a good credit score. What is a credit history? Your credit history is a way of tracking your credit behaviour and habits — basically it shows how disciplined and regular you are when it comes to repaying your dues on loans that you have taken. It will show a complete record of your past borrowing and repayment record including details about any late payments or if you have defaulted on a loan. This track record is readily accessible to lenders and is used by them to when reviewing your loan application. Borrowers who have historically had a bad record of managing...

Income tax Section 80CCF - A Tax saving Scheme that has Buyback Option IDFC Infra Bonds

IDFC has come out with a public issue of long-term infrastructure bonds in the form of secured redeemable non-convertible debentures. Investments of up to . 20,000 in these infrastructure bonds are eligible for tax exemption under section 80CCF. This is in addition to the . 1 lakh limit available under Section 80C, 80CCC and section 80CCD of the Income-Tax Act. The issue is currently open and will close for subscription on December 16. The bonds on offer have two investment options. While series 1 carries a 9% coupon, payable annually, series 2 is a cumulative option where 9% will be paid compounded annually. The face value of each bond is . 5,000 and one can apply for a minimum of two bonds. The bonds have a lock-in period of five years. At the end of five years, you can sell the bonds on NSE. Also, there is a buyback facility available. Investors can subscribe to these bonds in either the physical form or in demat form. An investment of . 20,000 would fetch a tax exemption of . 2,...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now