Home/Housing Loan Insurance- Is Tax Deduction Available ?
Home/Housing Loan Insurance
Is there any tax benefit available on it?
Yes, these kind of policy are available for tax exemption
u/s 80C and sec 10(10 D) of the income tax act. The reason for that this policy
also cover life of the insured for specific nature of transaction.
What is Home/Housing Loan Insurance?
Home/Housing loan Insurance plan that covers your home loan
liabilities in case of unfortunate demise of policy holder within the policy
term. It ensures that the family of the insured does not lose the house purchased
in case of death of the loan holder. The proceeds of home loan insurance cover
help the family repay outstanding loan.
In simple words, it is an Insurance plan that covers only
your outstanding loan liability (as per the original schedule in most cases).
In case of death of the borrower; the proceeds of home loan insurance cover
help the family repay outstanding loan
What is the eligibility to get that?
The borrower of home loan with minimum age of 18 years and
maximum falls b/w 60 years and 70 years depends on the provider.
What are benefit/advantages?
v
On the event of death of insured the sum insured
will help to repay outstanding home loan.
v
Policy can be included in the housing loan and
repaid as Part of the loan repayment installment.
v
Decreasing sum assured makes that you do not pay
for protection you don’t need.
What can go wrong?
v
In case of prepayment of loan possibly end up
paying excess premium.
v
In case of transfer of loan, transferring of
existing home loan insurance policy possibly irksome.
v
In case of loan restructuring the policy may
leave you underinsured the reason of that in most of cases, amount of insurance
cover comes down with the amount of outstanding liability, since the insurance
cover works as per the original payment schedule.
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