Hi,

I am planning to go for a Axis bank home loan of 40 lakhs for an under construction property. I would like to know whether insurance is mandatory and how much will it cost with Axis bank?

In general, is insurance mandatory with all home loan providers and how can one avoid it?

Thanks.
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  • no insurance is not mandatory but suggestion is take insurance for future safety.
    Home insurance charges are from Rs.90 to Rs.180/- per lac
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  • Insurance is not mandatory for under construction property, but is mandated when you take possession by Axis bank.

    Originally Posted by bulletproof
    Hi,

    I am planning to go for a Axis bank home loan of 40 lakhs for an under construction property. I would like to know whether insurance is mandatory and how much will it cost with Axis bank?

    In general, is insurance mandatory with all home loan providers and how can one avoid it?

    Thanks.
    CommentQuote
  • Abhay sorry to differ, but my suggestion for UC property would be to take a life insurance for the loan amount than going for insurance. Since before possession there cannot be any theft event and casualities like earthquake or flood are already covered through builder insurance since property is builder's responsibility before possession.

    Though I agree completely with you for a delivered/RTM property.

    Originally Posted by abhay
    no insurance is not mandatory but suggestion is take insurance for future safety.
    Home insurance charges are from Rs.90 to Rs.180/- per lac
    CommentQuote
  • I have taken life insurance policy from MAX Life insurance and i want to know this point in it :How much amount i will get after 1 year if the premium was 70k and cover was taken for 20 yrs for housing loan.
    1.2 Surrender Benefit: During the Period of Coverage, a Member may at any time, request for the surrender of his insurance by making a written request through the Master
    Policy holder or directly to us. Upon receipt of such written request and provided, we have not received a claim request for Death Benefit under Section 1.1 for such Member, We shall
    pay the surrender value to the Member, based on the formula given : Surrender Value = 70% of Premium paid *(Unexpired risk period in months at the date of Surrender / Total Period
    of Cover in months)* (Sum Assured applicable on the date of Surrender / Sum Assured at on the effective date of coverage).
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  • I had applied for home loan from Dewan Housing. They had taken 2810/- from me but hadnt given me the sanction letter. Although they told me just verbally tht loan is sanctioned but refused to give me the sanction letter.
    Please suggest what i can do in this case?
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  • Is home insurance is mandatory for axis bank home loan
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  • No,it is not mandatory.Please refuse it otherwise if u cancel it later after opting for it,u will get < 70% of ur amount.
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  • Hi Folks,

    I need answers of few questions that are in my mind regarding home insurance :-

    i) Axis Bank makes it mandatory for customers to buy home insurance. I want to know if we can take it for some time only. Suppose i have taken home loan period of 20 years and want to insure home for just 5 years, Can it be done??

    ii) After opted for home insurance, if i want to cancel the policy after some years, will i get the refund. If yes, then how much??
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  • I already have LIC insurance policies of more than 50L. DO I need to accept property insurance from Axis bank at the time of possession? the loan amount is 40L.
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  • Hi Dhruv,

    Lets be clear about insurances here. There are 2 kinds of insurances:

    Loan insurance: This is optional life insurance for the person who has taken the loan. The coverage is for total approved amount of the loan. On the death of the person, the insurance comes into picture. Insuring company pays outstanding amount to the bank and remaining amount (=Total loan - outstanding) to nominee.

    Structure insurance: This is mandatory insurance. This is required at the possession of the property, not before. This insurance covers only the structure (e.g. walls) and it is cheap.
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  • I read somehere that Axis prefers Tata AIG insurance, and it is valid for 5 years only where you pay a huge amount for the insurance.
    I found these two links:
    * How Axis Bank fooled a Home Loan Customer – Real life Case
    * 7 Reasons Why You Should Not Buy Home Loan Protection Plan (HLPP)?

    I am also a customer of Axis bank home loan, but I am not planning to accept the insurance plan they will make mandatory at the time of possession.
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  • I found the Loan agreement document of Axis online here: http://www.axisbank.com/download/Loan_Against_Property_Agreement.pdf

    Can someone explain the following points:
    * The bank will have a right, at Borrower's cost, to insure the Property or take any measure for the upkeepment and preservation of the Property
    * The bank will have the right to create a charge or mortgage over the Property as security in its own favour or in favour of any third party
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