Home Cover
Best ways to secure your house from natural and other calamities
- Sep 17, 2018,
- Updated Sep 24, 2018 2:18 PM IST
Ahouse is one of the biggest assets that one buys in one's lifetime. But an unpredictable natural calamity, such as the recent floods in Kerala, can destroy your prized possession in no time. The tragedy gets amplified for people who have taken home loans. Therefore, insuring your house against natural as well as man-made calamities is imperative.
Home loan insurance products are generally more expensive than term plans. There are multiple reasons for it. First, the underwriting process is quite liberal. "Hardly 2-5 per cent cases go for medicals, unlike in term policies," says Ghosh of Kotak Life Insurance. Second, term plans are available online, which brings down the cost significantly, while home loan insurance policies are mostly sold through banks, which charge a commission. However, insurance companies are of the view that home loan insurance could be cheaper in some cases as it largely depends on the group and the lender through whom the customer is buying the cover.
Everything boils down to the price you are paying. If you are sure that after you, your family members can manage all the paperwork and settle all claims, you can simply buy a term plan to cover the home loan amount. However, if you think it will be difficult for them to settle the claims and you don't mind paying extra, you could opt for home loan insurance.
"The whole logic of reducing the term cover was that it should be cheaper than the constant cover but it is generally more expensive. My view is that hardly anybody buys insurance to cover the increased liabilities due to loan. Therefore, an expensive cover is better than no cover at all, says Harsha Roongta, CEO, Apnapaisa.com.
@renuyadav08
Ahouse is one of the biggest assets that one buys in one's lifetime. But an unpredictable natural calamity, such as the recent floods in Kerala, can destroy your prized possession in no time. The tragedy gets amplified for people who have taken home loans. Therefore, insuring your house against natural as well as man-made calamities is imperative.
Home loan insurance products are generally more expensive than term plans. There are multiple reasons for it. First, the underwriting process is quite liberal. "Hardly 2-5 per cent cases go for medicals, unlike in term policies," says Ghosh of Kotak Life Insurance. Second, term plans are available online, which brings down the cost significantly, while home loan insurance policies are mostly sold through banks, which charge a commission. However, insurance companies are of the view that home loan insurance could be cheaper in some cases as it largely depends on the group and the lender through whom the customer is buying the cover.
Everything boils down to the price you are paying. If you are sure that after you, your family members can manage all the paperwork and settle all claims, you can simply buy a term plan to cover the home loan amount. However, if you think it will be difficult for them to settle the claims and you don't mind paying extra, you could opt for home loan insurance.
"The whole logic of reducing the term cover was that it should be cheaper than the constant cover but it is generally more expensive. My view is that hardly anybody buys insurance to cover the increased liabilities due to loan. Therefore, an expensive cover is better than no cover at all, says Harsha Roongta, CEO, Apnapaisa.com.
@renuyadav08