When you take out a home loan, you commit to repaying a significant amount over many years. This financial obligation can be a source of concern, especially if you worry about your dependants’ future should something happen to you. HDFC Home Loan Insurance, specifically the HDFC Home Loan Protection Plan, is designed to alleviate such concerns by providing financial security in the event of the borrower’s death. Here’s what you need to know about this plan.
What is the HDFC Home Loan Protection Plan?
The HDFC Home Loan Protection Plan ensures that in the unfortunate event of your death, a sum of money is available to repay your outstanding home loan, securing your family’s home.
Benefits of the HDFC Home Loan Protection Plan
| Benefit | Description |
| Decreasing Sum Assured | The sum assured decreases over time, aligning with the outstanding loan amount, ensuring you pay only for the protection needed. |
| Single Premium Payment | Pay the premium as a single amount upfront, which can be included in the loan amount and repaid as part of regular installments. |
Eligibility Criteria
| Criteria | Details |
| Minimum Age at Entry | 18 years |
| Maximum Age at Entry | 50 years |
| Maximum Age at Expiry | 60 years |
| Maximum Sum Assured | Rs. 30,00,000 |
| Minimum Single Premium | Rs. 2,000 |
Cost of the HDFC Home Loan Protection Plan
The plan offers excellent value for money, with premiums that vary based on age and the term of the policy. Examples for a sum assured of Rs. 3,00,000 are:
| Age | Term (years) | Single Premium (Rs.) | Annual Cost (Rs.) |
| 30 | 20 | 7,374 | 369 |
| 35 | 15 | 6,813 | 454 |
| 40 | 10 | 6,231 | 623 |
Note: Premiums are exclusive of Service Tax and Education Cess.
Exclusions
The policy does not cover the following:
- Death due to suicide within one year of the policy commencement or reinstatement.
- Death due to non-accidental causes during the first 90 days of the policy.
Prohibition of Rebates
Section 41 of the Insurance Act, 1938, prohibits and punishes offering or accepting rebates on insurance premiums.
Objective of the Policy
The primary objective of the HDFC Home Loan Insurance is to settle the outstanding home loan in the event of the borrower’s death, ensuring that the family does not face financial hardship or the loss of their home.
Why Do You Need Home Loan Insurance?
When you secure a home loan, you commit to a long-term financial obligation. If you’re unable to fulfill this due to unforeseen circumstances like death, the lender can take possession of your home, leaving your dependents financially vulnerable. Home loan insurance helps mitigate this financial risk.
Who Should Consider This Plan?
The plan is particularly suited for those with a home loan liability. It ensures that family members can continue to live in their home. They won’t have the burden of repaying the loan if something happens to the insured person.
Additional Features and Benefits
- Tax Benefits: Premiums paid towards the plan are eligible for tax deductions under Sections 80C and 10(10D) of the Income Tax Act, 1961.
- Flexible Premium Payment Options: Pay the premium as a single installment or add it to your loan amount and repay it over the loan tenure.
Conclusion
The HDFC Home Loan Insurance, through the HDFC Home Loan Protection Plan, offers a strong safety net for home loan borrowers. This ensures their family remains secure in their home despite unforeseen circumstances. By choosing this plan, you protect your family’s future. You gain peace of mind knowing your financial obligations are covered. If you have a home loan or are planning to take one, consider the HDFC Home Loan Insurance to safeguard your family’s home and financial stability. Feel free to reach out to our team of experts for any queries.
FAQs
No, home loan insurance is not mandatory when taking a home loan from HDFC. However, we highly recommend it as it provides financial protection to the borrower’s family in the event of the borrower’s death. This insurance ensures the outstanding loan is settled. This allows the family to retain their home without the burden of repaying the remaining loan amount.
A home loan insurance policy is term insurance that settles the outstanding home loan if the borrower dies. Premiums can be paid upfront or added to the loan. This ensures the borrower’s family does not face repayment burdens. The sum assured decreases over time with the loan liability.
Yes, you can cancel home loan insurance after one year. However, it depends on the specific terms and conditions of the policy. It’s important to review the policy document or consult with the insurer to understand any cancellation charges or refund eligibility.
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