Prajna Capital - An Investment Guide

IT sounds the same, you might say, but there's a difference between home insurance and home loan insurance . The difference When you opt for home loan insurance , you will be insuring the home loan and not your home. That is, God forbid, if something were to happen to you (borrower), home loan insurance will take care of repaying the remainder of the loan to the bank. So, the burden of paying off the loan will not fall on the shoulders of the surviving family members. It will also prevent a situation where the home may need to be given up to the bank to help loan recovery. For instance - One takes a home loan worth Rs 30 lakh for 20-year loan tenure. He/She also takes an insurance cover for this loan. On the 18th year of his loan, Insured meets with an untimely death. The insurance company will pay the remainder of the principal, approximately Rs 9 lakh, to the bank. Thus foreclosing the loan. What’s my premium? Premium for this insurance cover varies for different insurance compa...