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Home insurance with home loan?

Last updated: January 19 2019
16 | Posts
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  • #11

    #11

    Re : Home insurance with home loan?

    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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    • #12

      #12

      Re : Home insurance with home loan?

      Hello Freinds,
      I am new member of this forum, I am intersting to buy 1 bhk at Amrapali dream valley project. Kindly let me know the price of this property.

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      • #13

        #13

        Re : Home insurance with home loan?

        Originally posted by nidhi_mumbai View Post
        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.
        I did the same, avoided SBI Rin Suraksha insurance. Instead opted for ICICI i Care term plan.

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        • #14

          #14

          Re : Home insurance with home loan?

          Taking a term plan of same amount would alwayd be adviced than home loan insurance, benefits being:
          - Cheaper
          - Provides insurance even after loan payment
          - Insurance would always be for full loan amount, not for outstanding loan amount

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          • #15

            #15

            Re : Home insurance with home loan?

            Originally posted by himrathore View Post
            Taking a term plan of same amount would alwayd be adviced than home loan insurance, benefits being:
            - Cheaper
            - Provides insurance even after loan payment
            - Insurance would always be for full loan amount, not for outstanding loan amount

            @himrathore- while the positives you mention are true but it is not the same as home loan insurance right? what happens if the under construction property falls down? on a different note in such a case when building falls down, isnt builder liable to either pay or reconstruct the flat of the owner? at least until possession?

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            • #16

              #16

              Re : Home insurance with home loan?

              Home insurance and term plans are two different plans to insure what you possess. Some insurers are now clubing these two with home loan insurance and providing a consolidated solution where buyer does not need to look for different plans. While it serves the purpose of a clubed and hasselfree insurance, it normally comes out to be costlier.

              My suggestion would always be to buy plans seperately as combined plans have some extra strings attached.

              You are correct on understanding insurance liability before possession, and it is completely of builder. So no need to buy home insurance before possession, and if you buy then also it would eventualy not cover what you intend to.

              Hope this helps

              Originally posted by avi3001 View Post
              @himrathore- while the positives you mention are true but it is not the same as home loan insurance right? what happens if the under construction property falls down? on a different note in such a case when building falls down, isnt builder liable to either pay or reconstruct the flat of the owner? at least until possession?

              Comment

              • #17

                #17

                Re : Home insurance with home loan?

                I am taking loan from IIFL(India-Infoline) and they are forcing me to take insurance on home loan.

                So what should I do in that case? Because I don't want to buy insurance.

                Please help me.


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