Reimbursement of the mortgage
Death is a sad event which is very unfortunate in life for you as well as your family, and it can become even worse if you are the sole breadwinner in the family. In such a sad event, the payment/EMI of the loan amount is transferred to the dependents of the borrower. In the event of the death of the purchaser, the family is required to repay the outstanding amount of the mortgage in order to keep the property; otherwise, the bank can liquidate the property to recover the debt.
What do the experts advise?
A protection plan is generally recommended when taking out a mortgage, so that in the event of an unforeseen event, the individual or his family is able to repay the debt. The applicant will receive the amount of coverage in the form of funds from the term insurance or the loan protection plan in the event of an unforeseen event such as the death of the buyer of the residential property. This money can then be used to pay off outstanding debt and retain possession of the property. Home loan insurance gives you and your family much-needed peace of mind by protecting them from unforeseen events.
Why should you buy mortgage protection?
Home loans can last 25 to 30 years or more. One thing to clarify, when taking out a home loan, home loan insurance is not mandatory. However, as a method of safeguarding your income and valuables, such insurance becomes necessary for the borrower.
We all know that there are no guarantees in life and the loan can last a long time as said above. In unfortunate events, such as death, and if the loan amount is not repaid, an item that has value to the family or can be used in times of need may be confiscated. Therefore, in cases like these, you need to plan ahead to protect your family and loved ones. Term insurance is comparable to home loan insurance.
This insurance covers you for the entire repayment period of your loan. The insurance period ends when the balance of the loan is paid off. However, if the person repaying the loan dies during the life of the loan, the family can use loan insurance to pay off the outstanding balance of the home loan. This makes it a compelling reason for home loan protection. Additionally, it prevents the bank from seizing the house or other assets used as collateral.
What you need to know
As an insurance buyer, you must remember to do your research before selecting this choice. Financial organizations may try to sell you insurance to make money, but you should buy the policy that best suits your needs. You also don’t need to take out insurance immediately if you take out a loan. You can purchase insurance afterwards from another financial institution, bank or insurance sales portal.