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- Originally Posted by amit2222Ashok,
Here are the details:
LifeGuard offers a choice of 2 life insurance plans: LifeGuard with Return of Premium and LifeGuard Single Premium.
I just happen to know about this as one of my close friend took it from another friend of mine...
Also, see attached picture for a comparison chart of different products.
I suggest you to talk to your bank (HL provider) first before buying any product. Tell them that you are not interested in their insurance product and examine what their response is.
Life Guard with return of Premium seems good. The Bank insisting me to take home insurance with loan..saying it's madatory with home loan.. I don't know if any bank has rights to force customer to take Home insurance?CommentQuote0Flag
- Ashok and Ranjit,
I suggest you both to negotiate with your respective bankers and say a strict No to home insurance clubbed by them along with the loan. You tell them that if it is mandatory then I will fetch the insurance cover from some other XYZ company.
Also, please understand the importance of insurance in terms of risk involved in payment of your outstanding loan amount. Your family will come under heavy pressure and might loose an asset in case of any untoward incident. Therefore, please do take insurance cover for the risk whether home insurance policy or term insurance policy.
I have already explained my thoughts on both and feel term insurance is a better choice as it covers you primarily and not the house. In my view, you are more valuable (invaluable) than the house (few lakhs??). So as a person, I would like to cover a relatively bigger risk.
As Ranjit has already provided rates for comparison, it all comes down to whether you would like to take cover with return of premiums after policy term or single premium. Get your risk assessment check from a good advisor before you buy.CommentQuote0Flag
- Insurance is not Mandatory.
When I took my first loan from SBI, they said that it is required to go for a Insurance. They also explained why it is required. The reason is to protect our family from the burden of loan repayment if the applicant is no more.
When I went to LIC housing finance for my second loan to buy an appartment in Suncity Gloria, they have not insisted for the Insurance being an insurance company.
That means it is not at all mandatory.
Good luck in your venture.CommentQuote0Flag
- Thanks to you all for your valueable suggestions..CommentQuote0Flag
- Dear Mr. Ashok,
Thanks for your invaluable I/p..
The DSA of the Loan providing agencies make the customer gullible and take them for riding by cross selling their schemes like this more over they give little knowledge of the utility of the insurance policy.
Home loan policy without any return is just like diminishing return over period of time and its always wise to make our own calculations for covering the risk,so at any day best thing is to go for term insurance (and not home insurance owing to following benefits:-
Flexibility to use the amount in case of casualty
Flexibility to decide to divest from property and still have cover for larger benefit.
Flexibility to make risk cover any amount to avoid volatile interest rate and hence cost of property which any ways is fixed cover given by both-term & home insurance
Flexibility to have best Term policy available in market.
1) Term insurance cover remains constant for the entire period.. While after each EMI, the housing loan cover reduces. Although the insurance companies claim that they take care of this difference by reducing the premium amount, but if you do the maths and take into account that the insurance premium increases as you age, you will find that the deal is not good enough.
2) Interest Rate fluctuation: Rise of even 0.5% of interest rate would increase the EMI term for additional year, however this insurance does not give you any insurance cover for those EMI. On the other hand if the interest rate falls and the period of the loan gets reduced, the refund from the insurance premium is minuscule. (thanks to their service charges.)
3) Foreclosure: Most of us agree that even though we take a housing loan for 15-20 years, there is always a chance that we will have to foreclose… Reason could be because you have made enough money to pay of the loan dues and save on interest, or because you want to sell the house (move to a different city/bigger place) or you might to switch the loan from one bank to another… In event of foreclosure, the home loan insurance is void.
4) Full fledged term insurance gives you an opportunity to have all the additional extra benefits like disability, critical illness etc… which are not covered in the home insurance.
Hence, although I strongly recommend a person to go for a insurance the moment he takes up a long term financial commitment like housing loan (or marrying and promise to pay the wife’s shopping bills), its best to make it a plain vanilla term insurance rather than an exotic scheme like this. This scheme might look cheaper on the first glance, but due to limited benefits, it only reduces the flexibility.Originally Posted by amit2222Ashok4814,
Any day, term plan is better than home insurance plan. However, bank would force you to take home insurance from the same bank as they have tie ups with an insurance company/agent (or have their own company).
There are term insurance plans which will return all the premium paid by you after the policy ends. So you don't end up loosing money for insurance needs while covering the risk involved by increasing your debt liability (as a loan taker).
The other major difference between term plan and home insurance plan is that term plan is for a specific yet fixed sum assured amount (say 20 lacs). And the sum will remain fixed for the entire period of policy (say 20 years). But home insurance works on diminishing or reducing sum assured in relation to your outstanding loan amount (check the attached picture).CommentQuote0Flag
- Anybody talked to axis bank regarding making axis bank the nominee in term insurance planCommentQuote0Flag
- just found out insurance is not mandatory in axis, after possession it is compulsaryCommentQuote0Flag
- Originally Posted by vsangaljust found out insurance is not mandatory in axis, after possession it is compulsary
Could u share this evidence with us...even could drop me line.
Since we are being forced to do so..at time of possession we can certainly go for Term Insurance...in whichever firm we feel..
Thanks in +vanceCommentQuote0Flag
- Originally Posted by ashok4814Is home loan manatory with home loan. Actually i have applied for a loan from IDBI bank, before approval the loan they are assisting me to take home insurance. they are saying it's mandatory. IS IT SO?
no its not mandatory...try out some other banks too...CommentQuote0Flag
- SBI Max gain plan is the best if you get it in some how.CommentQuote0Flag
- Hi Folks,
I faced some issues while taking loans.Please suggest :
1) I took a home loan of 37 lacs from Axis through DSA. ROI is 10.25%.
-The address mentioned is wrong so when can i apply for change of address and how?
-Is there any charges Axis will charge for the same?How many days it will take now?
-Will they send all the docs to my new address?How much it will cost me?
2) While disbursing the home loan,they forced me to take life insurance cover and property insurance.
Since i was closing the deal, so i took that.
Is there anything i can do to cancel these?How much charges it will take?
3) How can i claim benefit in income tax for the same.
4) I have taken personal loan from ICICI bank and processing fees was 0.8%.Is it Ok?CommentQuote0Flag
- Can some confim if home insurance is mandatory with home loan. Banks sbi iciici axis are forcing me saying its per rbi guidelines. Sbi said thry will check and confirm if rin raksha is mandatory too.CommentQuote0Flag
- Well, as important as it might seem, it is not mandatory to buy a home loan protection plan along with your home loan. The law, IRDAI and even RBI doesn't deem it as a compulsion. It is at the sole discretion of the buyers and banks cannot force them to buy it.
If some bank officials or a bank itself forces you to buy one, refusing to lend a loan in case you don't, you can do the following things:
(1) Make them aware of the fact that you know that it is not mandatory by law
(2) Ask them to give it in writing
(3) Communicate with the senior management of the bank
(4) Raise a complaint to the Banking Ombudsman
While all this must help, it must be noted that it is more about securing the amount being given out to borrowers and is not such an issue if it is not being forced upon.CommentQuote1Flag
- I applied for SBI Maxgain loan, Bank official told me 2 types of insurance - Property Insurance (To cover damage by fire, earthquake, flood, Natural calamity) & Rin Raksha (Term life insurance). As per him Rin Raksha is not mandatory but property insurance is mandatory & which you have to take at the time of possession of your under construction property. However you can choose the term - 5 yrs/10 yrs/20 yrs etc. This insurance will be on either the construction cost of the property or agreement value & accordingly your premium will be. Trying to search on RBI website if property insurance is mandatory, can't find it anywhere specifically written.CommentQuote0Flag
- From what I have been reading about it, property insurance is not mandatory but has been conveniently included by banks offering home loans.CommentQuote1Flag