Home insurance with home loan? - Page 2 - Indian Real Estate Forum

nidhi_mumbai · 09-08-11

DOn't go for home loan insurance if you are planning to pre-pay the loan. In home loan insurance, the entire premium is added upfront and incase of prepayment you only get back the surrender value calculated as -

(45% of the Premium paid less taxes) x (Unexpired term/ Total term) x (Sum Assured benefit at the time of surrender** / Sum Assured at inception).

*This is the SBI Policy

A simple plain vanilla term insurance would be much cheaper as you can stop paying the premium once you have repaid the loan. Also, these days you have the option of a decreasing balance policy.

09-08-11	#11
nidhi_mumbai New Member Join Date: Aug 2011 Posts: 31 My Mood: Thanks: 0 Thanked 0 Times in 0 Posts	No home loan insurance if you plan to prepay DOn't go for home loan insurance if you are planning to pre-pay the loan. In home loan insurance, the entire premium is added upfront and incase of prepayment you only get back the surrender value calculated as - (45% of the Premium paid less taxes) x (Unexpired term/ Total term) x (Sum Assured benefit at the time of surrender** / Sum Assured at inception). *This is the SBI Policy A simple plain vanilla term insurance would be much cheaper as you can stop paying the premium once you have repaid the loan. Also, these days you have the option of a decreasing balance policy.

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