No one plans for emergencies, but being prepared can make all the difference. ICICI Home Loan Insurance ensures your home loan doesn’t become a burden during crises like accidents, death, or prolonged illness. By covering your EMIs under such circumstances, this policy protects your family’s home ownership and spares them financial stress. With customizable coverage options and a hassle-free claims process, securing your loan has never been easier—or smarter.
ICICI Home Loan Insurance Highlights
| Feature | Details |
|---|---|
| Entry Age (Min/Max) | Minimum: 18 years Maximum: 65 years (based on completed age) |
| Minimum Coverage Amount | ₹5,00,000 |
| Policy Duration (Min/Max) | Minimum: 5 years Maximum: 30 years |
| Maturity Age (Min/Max) | Minimum: 23 years Maximum: 70 years (based on completed age) |
| Premium Payment Options | One-time payment or pay over 5 years |
| Death Benefit Choices | 1. Fixed Cover 2. Reducing Cover |
| Premium Payment Frequency | Annually |
| Grace Period for Payment | 30 days |
| Tax Benefits | Eligible for tax deductions on premiums and payouts, as per current tax laws |
Check Out: Home Loan Insurance Calculator
How Does ICICI Home Loan Insurance Work?
Mr. Rajesh, a 35-year-old software engineer, took a ₹50 lakh home loan (25-year tenure) for a ₹75 lakh property. To secure his family’s future, he purchases ICICI Pru Loan Protect , a home loan insurance plan.
Step 1: Policy Structure & Options
| Parameter | Options Available | Mr. Rajesh’s Choice |
|---|---|---|
| Policy Term | 25 years (full loan tenure) | 5 years (shorter term) |
| Premium Payment Term | Single premium (one-time) or 5-year term | 5-year term (annual installments) |
| Sum Assured | ₹50 lakh (matches loan amount) | ₹50 lakh |
| Death Benefit Type | Reducing Cover or Fixed Cover | Reducing Cover |
Step 2: Premium Calculation
| Cover Type | Annual Premium | Total Premium (5 years) | Key Feature |
|---|---|---|---|
| Reducing Cover | ₹4,200 | ₹21,000 | Payout decreases as loan balance reduces |
| Fixed Cover | ₹5,800 | ₹29,000 | Payout remains ₹50 lakh for the entire term |
Scenario 1: Reducing Cover
| Year | Outstanding Loan | Death Benefit Payout |
|---|---|---|
| Year 1 | ₹50 lakh | ₹50 lakh |
| Year 3 | ₹42 lakh | ₹42 lakh |
| Year 5 | ₹38 lakh | ₹38 lakh |
Outcome:
If Mr. Rajesh passes away in Year 3 , the policy pays ₹42 lakh (matching the outstanding loan). His family retains the home debt-free.
Scenario 2: Fixed Cover
| Year | Outstanding Loan | Death Benefit Payout |
|---|---|---|
| Year 1 | ₹50 lakh | ₹50 lakh |
| Year 3 | ₹42 lakh | ₹50 lakh |
| Year 5 | ₹38 lakh | ₹50 lakh |
Outcome:
If Mr. Rajesh passes away in Year 3 , the policy pays ₹50 lakh. The bank receives ₹42 lakh (loan balance), and the remaining ₹8 lakh goes to his family.
Key Benefits Summary
| Feature | Reducing Cover | Fixed Cover |
|---|---|---|
| Premium Cost | Lower (₹4,200/year) | Higher (₹5,800/year) |
| Payout Structure | Aligns with loan balance | Fixed ₹50 lakh |
| Best For | Budget-conscious borrowers | Those seeking extra funds |
Suggested Read: Home Loan Insurance vs. LIC Term Insurance
ICICI Pru Loan Protect – Detailed Benefits
1. Death Benefit
For an active policy, the death benefit will be paid to the nominee upon the policyholder’s death during the policy term. The payout depends on the selected death benefit option (Fixed Cover or Reducing Cover) at the time of purchase.
Fixed Cover – Sum Assured:
- One Pay Option: Always higher than 125% of the single premium.
- Five Pay Option: Always higher than 7 times the annual premium or 105% of total premiums paid.
2. Surrender Value
The policyholder may receive a surrender value if they terminate the policy early.
- One Pay Option: Surrender value is available on voluntary termination.
- Five Pay Option: Surrender value is available if:
- The policy is voluntarily terminated, or
- Premium payments are stopped and not revived within the revival period (policy discontinues after the grace period ends).
Note: The surrender value depends on the year of discontinuation and may be nil.
3. Grace Period
- A grace period of 30 days is allowed from the premium due date.
- If the premium is not paid within this period, the policy will lapse and cover will cease.
4. Revival of the Policy
A lapsed policy can be revived within 5 years from the first unpaid premium due date. Conditions include:
- Policyholder must provide satisfactory medical evidence at their own expense.
- Any overdue premiums plus applicable interest must be paid.
- Example: Interest rate in Dec 2019 was 7.97% p.a. compounded half-yearly.
- If required, evidence of the loan continuing must also be provided.
- Revival terms may differ from the original, including additional charges or revised premiums.
- ICICI Pru reserves the right to accept or reject revival.
Revival is effective only after the company notifies acceptance. Any regulatory changes will be communicated.
Benefit Illustration
| Criteria | Details |
|---|---|
| Age | 30 years |
| Gender | Male |
| Loan Tenure | 10 years |
| Loan Amount | ₹30 lakh |
| Policy Term | 10 years |
| Premium Payment Option | Five Pay / One Pay |
| Fixed Cover Premium | ₹8,340 (Five Pay) / ₹34,560 (One Pay) |
| Reducing Cover Premium | ₹6,780 (Five Pay) / ₹28,020 (One Pay) |
Suggested Read: Home Loan Insurance for Green Homes
ICICI Home Loan Insurance: Terms and Conditions
| Clause | Details |
|---|---|
| 1. Suicide Clause | If death by suicide (sane or insane) occurs within 12 months of policy start or revival, higher of 80% of total premiums paid or surrender value is refunded. Policy terminates post-payment. |
| 2. Free-Look Period | Cancel within 15 days (standard) or 30 days (electronic/distance). Refund after deducting stamp duty, medical charges, and risk premium for the covered period. |
| 3. Tax Benefits | Available as per prevailing Income Tax laws. GST and cess extra. Subject to change. |
| 4. Benefit Lock-In | Death benefit and sum assured are fixed at policy inception and cannot be changed. |
| 5. Exclusions | No additional exclusions beyond what’s mentioned. |
| 6. Savings Element | Pure protection plan; no maturity or paid-up value. |
| 7. Policy Assignment | Allowed under Section 38 of Insurance Act, 1938. Only policyholder can assign. Not permitted under Married Women’s Property Act, 1874. |
| 8. Nomination | Allowed under Section 39. Nominee can be changed anytime before termination. For minors, appointee required. Company must be informed. |
| 9. Company’s Liability on Assignment/Nomination | Company does not verify or accept responsibility for the validity of assignments or nominations. |
| 10. Section 41 – Rebates | No person can offer or accept rebates outside official documents. Violations can result in fines up to ₹10 lakh. |
| 11. Section 45 – Misstatement/Fraud | Policy may be cancelled in case of fraud or misrepresentation as per Section 45 of Insurance Act, 1938. |
Suggested Read: Should You Opt for a Home Loan Insurance?
Home Loan Insurance Tax Benefits
- Premiums paid for home loan-related insurance may qualify for deduction under Section 80C.
- Applicable only when the insurance is bundled with the home loan.
Suggested Read: Home Loan Insurance Status Post Home Loan Closure
Conclusion
ICICI Home Loan Insurance is a smart way to secure your home and protect your loved ones from the burden of loan repayment in case something unexpected happens.
It offers flexible premium payment options, easy eligibility, and added peace of mind. Whether you’re a first-time homebuyer or already paying off a loan, this insurance can help you stay financially stress-free. Plus, some tax benefits may also apply.
Frequently Asked Questions
No, it’s not mandatory to buy home loan insurance with your ICICI home loan. However, it is strongly recommended as it helps cover the loan in case of unexpected events like death or disability.
If the borrower passes away, the loan still needs to be repaid by co-applicants or legal heirs. If there’s home loan insurance, the insurer may pay off the remaining loan.
Yes, home loan insurance is a separate product. You need to pay its premium either one-time or through limited payments, depending on the plan you choose.
Yes, home loan insurance typically covers death. If the borrower dies during the policy term, the insurer will pay the outstanding loan amount, depending on the cover type (fixed or reducing).
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