Are you planning to buy a home through means of a loan? If yes
then you must have a suitable life insurance plan in the first place.
Now you would say how home loan relates to life insurance. Well, there
is a strong connection between the two.
Home loan is a long term liability. The normal period of a home loan hovers from 10-20 years. It is a very long period. Now just think, what may happen in case you come across a deadly incident. Will your family be able to bear such a huge liability?
Definitely, everyone needs to be positive and forward looking. There are rare possibilities that one comes across untimely death. But, it is always better to be practical and secure his family through all possible means. It is a part of your responsibility. Isn't it?
Otherwise, it can be a miserable situation for your family. They may be approached by the bank for confiscation of the house and this will add to their emotional trauma. So, why to leave even one per cent possibility of an unfortunate incident?
A typical life insurance plan provides life insurance coverage of 10-15 times of the annual premium amount. Thus, if you pay Rs 50,000 as annual premium, you can expect life insurance coverage of around Rs 5-8 lakh.
Considering an instance of a home loan of Rs 40 lakh, you need to pay a premium of Rs 3 lakh a year. This is not always possible for us. It is a huge amount.
Today, the life insurance industry in India brings you a viable proposition of term life insurance plan. The cost is minuscule and the benefits aplenty.
For life insurance coverage of Rs 40 lakh, you are required to shell out a premium of just Rs 4,000-5,000. Yes, that's it.
As a responsible parent and head of family, you are rather expected to get a life insurance coverage of double your liabilities. Thus, if you require life insurance of Rs 50 lakh, then go for Rs 1 crore. Why?
The additional amount is against risk coverage of loss of income. In case of an emergency, your family can pay off the debt and invest the rest of the amount to earn interest income.
And the cost is negligible. For a cover of Rs 1 crore, you can buy a term insurance plan from Reliance Life in just Rs 9,300. HDFC Life's Click2Protect is also available at the same cost.
Make sure that the term of your insurance plan is equal to the term of your home loan plan. The monthly cost of premium will be less than Rs 1,000. In return, you get a peace of mind and a sense of fulfilling your responsibility.
The abovementioned plans are the most cost effective term insurance plans available in the market. You can explore them further and check their features in detail. Plus, you can search more options at http://www.policyx.com and satisfy yourself before making a decision.
Home loan is a long term liability. The normal period of a home loan hovers from 10-20 years. It is a very long period. Now just think, what may happen in case you come across a deadly incident. Will your family be able to bear such a huge liability?
Definitely, everyone needs to be positive and forward looking. There are rare possibilities that one comes across untimely death. But, it is always better to be practical and secure his family through all possible means. It is a part of your responsibility. Isn't it?
What to do?
If you are going to take a home loan, you must also have a life insurance policy of a commensurate amount. This will be a sort of hedging against the risk. If in case you are not around, your family should be able to pay off the debt.Otherwise, it can be a miserable situation for your family. They may be approached by the bank for confiscation of the house and this will add to their emotional trauma. So, why to leave even one per cent possibility of an unfortunate incident?
But, life insurance is expensive
Home loans run into several lakhs of rupees. In most of the urban areas, an average-size home costs anywhere in the range from Rs 40 lakh to Rs 1 crore. Most people take 60-80 per cent loan. Now, this translates into an EMI of tens of thousands.A typical life insurance plan provides life insurance coverage of 10-15 times of the annual premium amount. Thus, if you pay Rs 50,000 as annual premium, you can expect life insurance coverage of around Rs 5-8 lakh.
Considering an instance of a home loan of Rs 40 lakh, you need to pay a premium of Rs 3 lakh a year. This is not always possible for us. It is a huge amount.
So, what is the way out?
There are options at your disposal - no need to worry at all.Today, the life insurance industry in India brings you a viable proposition of term life insurance plan. The cost is minuscule and the benefits aplenty.
For life insurance coverage of Rs 40 lakh, you are required to shell out a premium of just Rs 4,000-5,000. Yes, that's it.
As a responsible parent and head of family, you are rather expected to get a life insurance coverage of double your liabilities. Thus, if you require life insurance of Rs 50 lakh, then go for Rs 1 crore. Why?
The additional amount is against risk coverage of loss of income. In case of an emergency, your family can pay off the debt and invest the rest of the amount to earn interest income.
And the cost is negligible. For a cover of Rs 1 crore, you can buy a term insurance plan from Reliance Life in just Rs 9,300. HDFC Life's Click2Protect is also available at the same cost.
Make sure that the term of your insurance plan is equal to the term of your home loan plan. The monthly cost of premium will be less than Rs 1,000. In return, you get a peace of mind and a sense of fulfilling your responsibility.
The abovementioned plans are the most cost effective term insurance plans available in the market. You can explore them further and check their features in detail. Plus, you can search more options at http://www.policyx.com and satisfy yourself before making a decision.
PolicyX.com is an IRDA approved insurance comparison portal
helping consumers compare, choose and buy policies online. We provide
health, motor, life, travel & corporate insurances from a wide range
of insurers.
Article Source:
http://EzineArticles.com/?expert=Naval_K_Goel
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