The feeling of buying your own home is a big deal for many. It takes months and years to save up and build a beautiful home for yourself and your family. Home loans are a popular choice to fulfil this financial goal, allowing better money management without overspending your personal savings.
With home loans, however, the burden of paying the monthly EMIs can be exhausting and overwhelming, especially for your family if you suddenly pass away. A term insurance plan is a good option to give your family that financial backup in such a situation.
Choose from the multiple options available by comparing premiums using a term insurance calculator to make the right decision.
But how does the term insurance help with protecting your home? Let us find out in this blog.
About Term Insurance
With the increasing unpredictability of life uncertainties, having a term plan is like a safety blanket to ensure your family is well protected in your absence. Investing in a term insurance plan to support your home loan might not seem a good decision. They do not seem to be interrelated in any way. However, a term plan offers many benefits and the perk of life cover.
As a life insurance policy, a term plan allows you to provide your family with financial safety at affordable premium rates. The connection between term insurance and home loans is easy to understand when considering the EMIs of your home loan.
Imagine the struggle of trying to gather money to complete EMI payments in your absence. What if they push your family out of the house after your unfortunate death, leaving them hopeless and homeless?
Below, let us discuss how a term insurance plan can help protect your home.
How Term Insurance Can Protect Your Home
- Financial Security
The primary benefit of investing in term insurance is to provide your family with ample money in case of your untimely demise. This money can then be used to complete the EMIs against the home loan without struggling to make ends meet.
- Asset Protection
Protecting the home that you constructed with all your hard work and love is also crucial. So, with the help of a term plan, you get life cover, allowing your family to ensure all due loan payments are completed, even if you’re not around. This will give them a roof over their heads while protecting your assets.
- Reasonable Premiums
Compared to other life insurance policies, a term plan comes with an affordable premium for the same benefits as others. Moreover, you get the flexibility of coverage between 20 to 30 years and can renew if required.
- Fixed Amount Claim
If you opt for a home loan protection plan, the claim amount depends on the loan amount. Therefore, the claim settlement amount is not fixed. However, in a term plan, the claim amount is pre-decided and given directly to the nominee in case of the policyholder’s death.
Differences Between Protection Plan and Term Plan
| Factor | Protection Plan | Term Plan |
| Coverage | No change | Customisable based on rider options |
| Premium Payment | One-time | The choice between monthly, quarterly, and yearly |
| Benefit | The insurer covers due loan payments in case of the death of the insured | The beneficiary gets a fixed claim amount under the death benefit |
Summing Up
Purchasing a house is a significant achievement, but giving it the right protection is also necessary. A term plan is easy to understand and benefits the policyholder’s family. It is a cost-effective financial tool to protect your family in unexpected situations like death.
You should explore all your options before choosing which term plan to invest in, but remember the peace of mind it offers while securing your home and family.
