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  • Home loan insurance, also known as mortgage insurance, has become extremely popular in today’s world due to the increasing prices of properties. Since the events in our lives are unpredictable, most people tend to secure their future along with the future of their loved ones with the help of home loan insurance. To know how it benefits us, we must know what home loan insurance is.

    What Is Home Loan Insurance?

    A home loan insurance plan is a scheme under which the insurer will settle the outstanding Home Loan amount with the lender or the bank in case of an unforeseen situation. Some of the comprehensive home loan insurance plans offers cover for the applicant, the house, and all its contents. The premium that is paid towards home loan insurance is applicable for tax benefits.

    Why Is Home Loan Insurance Important For Lenders?

    Lenders do not like their loans to turn into bad debts. Obviously, they would want to protect their money. In order to avoid a home loan turning into a very bad debt, lenders need home loan insurance. In the event of the borrower’s demise, the lender will be losing out on a lot of money, especially when the borrower was the only earning member of the family.

    Why Is Home Loan Insurance Important For Borrowers?

    As we already know, home loan insurance plan covers the outstanding home loan amount in a situation where the borrower fails to pay his/her debts. Such a situation may arise due to the borrower’s job instability or his/her demise. You may choose a regular plan or opt for one that comes with additional features and riders more enhanced coverage. Home loan insurance is important for the borrowers as it ensures that the dependents of the borrowers don’t become homeless in his/her absence or crisis situation.

    Aspects To Be Considered Before Opting A Home Loan Insurance:

    The ways that you may choose to insure the home loan are mentioned below:

    • Term insurance – It is purchased so that all your liabilities and debts are taken care of.
    • Separate home insurance – This insurance scheme only takes care of your home loan outstanding when you are unable to pay it off.

    Most of the home loan insurance schemes offer reducing coverage with them. The size of the coverage is linked to the home loan outstanding. Thus, the sum insured goes down when an individual repays the loan amount. However, in case of a term insurance, coverage stays the same. In case of term plans, the sum assured is received by the nominee who can make the payments to the lender or the bank for settling the loan. In case if a home loan insurance plan, the insurer directly makes the payments for the home loan outstanding to the lender for settling the loan.

    Home loan insurance can be purchased either from a general insurance company or a life insurance company. The ones that are offered by the general insurance companies need to be renewed on an annual basis. The policies offered by life insurance companies are for longer terms.

    It is of utmost importance that you ask about the riders and add-on covers. It is beneficial to get a plan that covers situations like unemployment and disability, along with death. Also check if the policy covers just natural demise or accidental demise too.

    The loan tenure and insurance cover period must match. It is not advisable to opt for a shorter cover period thinking that you will extend it later. There lies a very strong chance that you might forget to extend in the long run. Also, as you grow older, it only becomes difficult for you get a good coverage. Even if you get one, it will be pretty expensive.

    When you plan to purchase a particular protection scheme, ensure that it matches all your requirements. Compare various products in the market and pick the one that suits you the best. Before you bundle up your EMI payments with premium payments, sort your expenses.

    Features Of The Home Loan Protection Plans:

    • Payment of premium – Most of the home loan protection plans are all single premium policies. This means you make to make payment for the premium only once. As the amount of the premium is pretty high, lenders often add the premium amount to the loan amount. The borrower pays the premium along with the equated monthly instalments. For example, if you borrow a loan amount of Rs.30 lakh and the home loan protection that you opt for costs Rs.1.5 lakh, you will have to pay your EMIs calculated on Rs.31.5 lakh.
    • Life cover – Most home loan protection plans offer life coverage equivalent to home loan outstanding amount. As soon as the loan amount is cleared, the cover comes to an end.
    • Riders or Add-ons – Several insurance providers offering home loans insurance schemes provide optional rider plans to enhance their cover benefits. The riders that can be availed with home loan protection plans are mentioned below:
      • Terminal Illness
      • Accidental Death
      • Jobless up to three to six months of EMI payments
      • Disability

    The policy cost along with these additional features is more expensive than the other regular home loan insurance plans.

    Benefits Of Home Loan Protection Plans?

    • In the event of unfortunate demine of the borrower, the insurer repays the outstanding loan amount to the lender or the bank.
    • Tax benefits can be availed under Section 80C of the Income Tax Act.
    • The borrower can avail add-on coverages or riders to enhance your home insurance plan. Disability rider r critical illness rider ensures that the outstanding loan amount is covered not only in case of an unfortunate demise, but also during a disability or critical illness of the borrower.

    How Are Home Loan Insurance Plans Different From The Other Insurance Schemes?

    Regular insurance plans can be purchased anytime. However, the home loan protection plans cannot be bought at any given point. It can only be purchased when you have an existing housing loan or applying for a new home loan. Also, home loan insurance schemes are reducing covers that include the outstanding amount of loan only. The cover is only available till the end of the tenure of the loan, unlike other regular insurance policies.

    Is Buying A Home Loan Insurance Plan Mandatory?

    Purchasing a home loan protection plan is not mandatory. It is completely up to your choice if you wish to buy it or not. However, it is only advisable that you protect your future with a home loan insurance plan.

    Difference Between A Home Loan Insurance And A Home Insurance:

    Home loan insurance and home insurance are completely different. However, they sound similar and people often get confused between the two of terms.

    Home Insurance Plans:

    The home insurance plans, also known as homeowner’s insurance, offers coverage to your house and its contents against perils like fire, explosion, lightning, etc. It also offers protection against theft or burglary.

    Home Loan Insurance Plans:

    The home loan insurance plans or home loan protection plans clear your home loan debt in case you are unable to repay the borrowed amount due to death, disability or critical illness.

    Display of any trademarks, tradenames, logos and other subject matters of intellectual property belong to their respective intellectual property owners. Display of such IP along with the related product information does not imply BankBazaar's partnership with the owner of the Intellectual Property or issuer/manufacturer of such products.

    Home Loan Insurance Reviews

    • ICICI Bank Home Loan
      "Service should improve "
      0.5 2.5/5 "Just OK"
      I have availed home loan directly through ICICI Bank .The rate of interest and the processing fee was very less.This loan is still active and i have not received the loan on time. It took almost 1-3 months very long process and i went to bank and given all documents. Customer service need to improve and it is not recommended .
      Was this review helpful? 0
      , kolkata
      Reviewed on Jan 21, 2020
    • SBI
      SBI Home Loan
      "SBI home loan service is very good"
      0.5 5.0/5 "Blown Away!"
      I had a home loan from SBI and the sales executive was best because no one provides me this much low rate of interest compared to any other banks but they needs so much documents and their mortgage they do is really worst. Its due to the low rate of interest, i have selected the home loan from SBI. They have offered me a interest rate of 8.24%.
      Was this review helpful? 1
      , ahmedabad
      Reviewed on Jan 21, 2020
    • Aavas Financiers Limited Home Loan
      "Too Good Loan Service"
      0.5 5.0/5 "Blown Away!"
      I have taken home loan from AAVAS Finance and they have provided me a interest rate of 14.5%. I have bought this loan of Rs. 8.30 lakhs and i pay EMI amount of Rs. 10,827 for the selected duration of 15 years. They do have a part payment and pre- close facility. They have sanctioned my loan in 15 days.
      Was this review helpful? 0
      , thane
      Reviewed on Jan 21, 2020
    • Federal Bank Home Loan
      "Good service"
      0.5 5.0/5 "Blown Away!"
      I have taken a home loan from Federal bank and it was a good loan experience. The loan amount was for Rs 18 lakhs with the rate of interest of 9 or 9.5% which is less when compared to all other banks. The process was quite lengthy and it took 1 month to receive the loan. Customer service was good. The tenure of this loan is 15 years .
      Was this review helpful? 0
      , kochi
      Reviewed on Jan 21, 2020
    • ICICI Bank Home Loan
      "FRAUD BY ICICI BANK"
      0.5 0.5/5 "Unacceptable"
      I have taken home loan from ICICI Bank. My Instalment is of Rs 44,000/-. I lowered my Instalment Amount from Rs 44000/- to 34207/-. But Bank deducted Rs 44,000/- from my saving and adjusted Rs 34207/- and showing Rs 9793/- as excess received. Now the amount is Excess with Bank and Bank is demanding as 9.05% interest on my Principal Due including Rs 9793/- as excess deducted. I requested Bank to adjust my Excess deducted amount from my Principal Due from the date it was deducted from my account. Bank is refusing to adjust the same from the date it was deducted. I also requested Bank to refund my money back with interest, as i have to pay 9.05% interest on amount excess deducted. Bank is also refusing for same. No body knows, that how much bank is having excess amount like this, which they have excess deducted from the customer account and not refunding it back to customer and also demanding interest on them. It is one of the WORST BANK of INDIA. I request everyone to be careful.
      Was this review helpful? 1
      , chandigarh
      Reviewed on Jan 21, 2020
    • ICICI Bank Home Loan
      "Good Loan Service"
      0.5 4.0/5 "Great!"
      I have chosen home loan from ICICI BANK Since I am holding a salary account with them so got this loan offer. When I check with the builder, they had a three option in that i have chosen this bank. I had applied the loan amount of Rs. 30 lakhs and they have sanctioned the same amount. Processing fee was a nominal one. In the year 2015, I got the loan with the tenure period of 30 years.
      Was this review helpful? 0
      , mumbai
      Reviewed on Jan 21, 2020
    • LIC Housing Home Loan
      "Easy loan approval"
      0.5 4.0/5 "Great!"
      I have taken a home loan, going with LIC Housing Finance. I am happy with their service. Rate of interest 8.5% and processing fee of 4500 rupees are nominal. They have sanctioned a loan on time within 2 days completed the process. The builder has approached, so i applied this loan. I am paying EMI 20K with the tenure of 24 years.
      Was this review helpful? 1
      , hosur
      Reviewed on Jan 20, 2020
    • LIC Housing Home Loan
      "More online requirement "
      0.5 3.5/5 "Pretty good"
      I have taken Home Loan directly through LIC Housing Finance. The rate of interest was 9.7% compare to market take little bit higher and their processing fee was fine. This loan was sanctioned on time without any hassle. I had given all required documents during verification process.
      Was this review helpful? 1
      , chennai
      Reviewed on Jan 20, 2020
    • HDFC Limited Home Loan
      "HDFC Home Loan - Kochi Branch- Worst Experience"
      0.5 0.5/5 "Unacceptable"
      HDFC provides the worst customer care ever. I had tried applying for a home loan from them and it is been more than 4 months and still the process has not been completed. Called them up multiple times from UK but very bad response. They showed much eager to obtain 12,000Rs from me for processing fee but no amount of effort was put forth from them. The manager nor the executive mentioned about a Power of attorney/ Notary service, only after me inquiring with my friends who have taken similar loans, I came to know about these mandatory documents for NRI. Again Mr.Abhilash and Mr.AkhilRaj acted as if it was my issue and they were not bothered. I sent all the documents to them via mail from UK 3 weeks back and till date they didn't respond whether they have received it or not. I called them everyday from UK waiting my time, energy and money. The anxiety they showed towards 12,000rs processing fee got over once I sent them the cash. My registration is not completed. For nearly 5 months, I
      Was this review helpful? 1
      , kochi
      Reviewed on Jan 20, 2020
    • HDFC Limited Home Loan
      "Satisfactory"
      0.5 4.0/5 "Great!"
      I have taken home loan through HDFC LTD directly .I have taken this loan before 15 years .I am not sure about rate of interest since availed long back ,I have got the loan on time and without any drawbacks closed this loan successfully.The loan process was clearly discussed by the agent am fully satisfied with their service
      Was this review helpful? 1
      , chennai
      Reviewed on Jan 20, 2020
    • DHFL Home Loan
      "Need to improve services"
      0.5 1.5/5 "Bad"
      I have taken a home loan from DHFL to purchase the flat. I have opted for 16.5L of loan amount according to their process with the interest rate 10.4% which is really high. I was eligible for the government scheme, but bank executive has not taken step to avail it. It took around 20 days to process the loan. There is no proper response for customers. I am trying to transfer the loan amount to other bank.
      Was this review helpful? 1
      , new delhi
      Reviewed on Jan 18, 2020
    • review Home Loan
      "Need to decrease the rate of interest"
      0.5 5.0/5 "Blown Away!"
      I have taken a home loan from REPCO HOME FINANCE and the loan amount was Rs. 13.25L. The rate of interest is 9.5% which is nominal and the tenure period they given for 20 years and with the EMI of 12450. I receive this loan within 25 days. Earlier i was applied through onlne , they asking heavy documents, so i applied directly through bank. Documentation was simple, i have given only address proof and salary slip.
      Was this review helpful? 2
      , coimbatore
      Reviewed on Jan 18, 2020
    • HDFC Limited Home Loan
      "prompt app based sercice."
      0.5 3.0/5 "Satisfactory"
      theybhelped me transfer my loan. they r much focussed on small documents and delayed due to it but deliveredat last. got my emi reduced by 3000/- approx. the agent concerned was verybhelpful and collected all details from my home. it was actually home based home loan.
      Was this review helpful? 0
      , kolkata
      Reviewed on Jan 18, 2020
    • LIC Housing Home Loan
      "fraudesters and corrupt to the core organisation."
      0.5 0.5/5 "Unacceptable"
      the office staff are very bad behaving with customers. LICHFL is very fraud, corrupt to the core and worst organisation. they even wanted money for the closure/balance transfer of loan. employee named piyali das posted at chowringhee sq branch was involved with the branch manager. they ensured the delay of my loan transfer on arious pretexts. i mailed to agm. no respinse. no body listens there to customers. the rae of interest never falls once youbtake loan. is advised to beware of their trap.
      Was this review helpful? 0
      , kolkata
      Reviewed on Jan 18, 2020
    • SBI Home Loan
      "Easily accessible with less documents"
      0.5 4.0/5 "Great!"
      I have got a pre-approved home loan from SBI and they have given me a offer like that their interest rate is starting from 7% but they have provided me a interest rate 8.25%. I had applied the loan amount of Rs. 35 lakhs with the duration of 25 years. I heard that interest rates are low so i approached with them. I had a online contact number specially for my home loan so they directly approached my home. They are asking very less of documentation like current residential address, last 3 months payslip, my job offer letter. They have given me a link also to process the loan.
      Was this review helpful? 2
      , chennai
      Reviewed on Jan 18, 2020
    • HDFC Limited Home Loan
      "Easy loan"
      0.5 3.0/5 "Satisfactory"
      My home loan was taken from HDFC Limited but the rate of interest was nominal. The interest rate was 10.8% when I took the loan and it will be good if I get an offer around 8%. Pre closure is there, but i am not sure about the charges and i am paying EMI of Rs.20280 with the tenure of 15 years.
      Was this review helpful? 2
      , chennai
      Reviewed on Jan 17, 2020
    • review Home Loan
      "Best Service"
      0.5 5.0/5 "Blown Away!"
      I have taken home loan directly through Saraswat Cooperative Bank .The rate of interest and the processing fee was nominal and got this loan sanctioend on time without any delay .Each and evey information about th loan was cleary shared by the agent .I am convenient with the service so far .
      Was this review helpful? 1
      , thane
      Reviewed on Jan 17, 2020
    • Karnataka Bank Home Loan
      "Very Good Service"
      0.5 5.0/5 "Blown Away!"
      I have taken home loan directly through Karnataka Bank.The rate of interest was 8.37% it was very less and there was no processing fee.This loan was sanctioned within 20 days .They have collected few documents like id proof address proof and income proof only since have salary account here.
      Was this review helpful? 2
      , surat
      Reviewed on Jan 16, 2020
    • Axis Bank Home Loan
      "Interest rate should be low"
      0.5 3.0/5 "Satisfactory"
      Axis bank customer care people offered me a home loan in a proper manner and i got the loan very easily so that i have selected the Axis bank for my home loan. I bought the loan amount of Rs. 3 lakhs and the offered interest rate was 13%. They do have a part payment and pre-closure facility without any additional charges. Documentation process was very simple and easy.
      Was this review helpful? 0
      , bangalore
      Reviewed on Jan 16, 2020
    • Punjab National Bank Home Loan
      "Overall not good"
      0.5 2.0/5 "Expected more"
      My home loan was taken from PNB Housing but the rate of interest is very high and disbursement was not happened in a proper way especially final disbursal. Since my builder where i bought the flat has a tie up with the PNB Housing, i have selected the same. When i compared to other bank, interest rates are quite high.
      Was this review helpful? 1
      , hyderabad
      Reviewed on Jan 16, 2020
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