Buying a home is a significant milestone, but securing it against unforeseen financial risks is equally important. LIC home loan insurance provides financial protection by covering outstanding loan amounts in case of unexpected events like death or disability. This ensures that your family isn’t burdened with loan repayments, offering peace of mind and long-term security.
LIC Home Loan Insurance Policy 2025 – All Details
Purchasing a home is a significant financial commitment, and securing it with an appropriate insurance plan is crucial. LIC offers the Home Loan Insurance Policy, designed to protect borrowers and their families from the burden of outstanding home loans in unforeseen circumstances.
| Feature | Description |
|---|---|
| Plan Type | Pure Protection Term Insurance Policy |
| Plan Basis | Group |
| Sum Assured | Minimum: ₹50,000; Maximum: No Limit |
| Premium Payment | Single premium based on age, loan amount, repayment schedule, loan term, and interest rate |
| Policy Term | Minimum of 3 years |
| Eligibility | Individuals with housing or vehicle loans; existing customers can join within six months of policy commencement |
| Death Benefit | Sum assured paid to nominee in lump sum |
| Tax Benefits | Premiums eligible for deductions under Section 80C; maturity proceeds tax-free under Section 10(10D) |
| Surrender Value | Not applicable |
| Loan Facility | Not available |
| Premium Payment Mode | Single premium |
Also Read: Home Loan Insurance for Green Homes
LIC Home Loan Insurance Eligibility Criteria
To be eligible for LIC home loan insurance, applicants must meet specific criteria.
| Eligibility Criteria | Details |
|---|---|
| Age | 18 to 60 years at entry; maximum maturity age of 65 years. |
| Loan Amount | Minimum sum assured of ₹50,000; no maximum limit specified. |
| Health Requirements | Declaration of good health; medical examination may be required based on loan amount and age. |
| Existing Borrowers | Can join within six months of loan commencement under specific conditions. |
How Does LIC Home Loan Insurance Protect Your Home Loan?
Securing a home loan is a long-term financial responsibility, and unexpected situations like the borrower’s demise can put the family under financial strain. LIC home loan insurance ensures that the outstanding loan amount is covered, preventing the risk of losing the home due to non-payment. Here’s how it works:
| Feature | Description |
|---|---|
| Covers Loan Balance | Pays the outstanding home loan in case of the borrower’s demise. |
| Decreasing Cover | Coverage reduces as the loan balance decreases. |
| Single Premium | One-time payment, no yearly renewals. |
| Direct Claim Settlement | Claim amount is paid directly to the lender. |
| Policy Term | Minimum 3 years, max maturity age of 65 years. |
| Tax Benefits | Premiums qualify for deductions under Section 80C. |
Case Study: How LIC Home Loan Insurance Helps
Scenario: Amit, 40, took a ₹40,00,000 home loan for 20 years and opted for LIC Home Loan Insurance. After 7 years, he passed away, leaving ₹30,00,000 unpaid.
How LIC Home Loan Insurance Helped:
| Benefit | Impact |
|---|---|
| Loan Coverage | LIC paid the remaining ₹30,00,000 loan balance. |
| Direct Claim Settlement | Amount was directly settled with the lender. |
| Home Ownership Secured | Amit’s family retained the house without financial stress. |
| One-Time Premium Advantage | No extra payments required after Amit’s passing. |
| Tax Benefits | Premium paid was eligible for Section 80C deductions. |
LIC Home Loan Insurance ensures financial security, preventing families from struggling with repayment and safeguarding home ownership.
What are the Benefits of LIC Home Loan Insurance for Home Loan Protection?
LIC Home Loan Insurance acts as a financial safety net, protecting borrowers and their families from loan repayment burdens in unforeseen situations. It helps secure homeownership and prevents financial distress.
| Benefit | Description |
|---|---|
| Affordable Premium Options | Borrowers can pay the premium upfront or include it in EMIs. |
| Financial Protection | Covers outstanding loan in case of the borrower’s demise. |
| Peace of Mind | Ensures the family does not struggle with loan repayment. |
| Safeguarding the Property | Prevents foreclosure by covering outstanding loan liabilities. |
| Preserving Savings | Reduces the risk of depleting emergency funds or personal savings. |
| Coverage for Unforeseen Events | Protects against financial distress due to job loss, disability, or death. |
Read More: How to Check LIC HFL Home Loan Status Online
What is the LIC Mortgage Redemption Plan?
The LIC Mortgage Redemption Plan is a group insurance scheme by LIC for individuals with vehicle or housing loans. It ensures loan repayment in case of the borrower’s demise, securing their family from financial burden. The premium is a one-time payment based on age, loan amount, tenure, and interest rate.
Available for a minimum of three years, this plan acts as a safety net, complementing financial commitments like LIC home loan insurance and providing peace of mind to borrowers. Existing customers can join within six months under specific conditions.
Features and Benefits of LIC Mortgage Redemption Plan
The LIC Mortgage Redemption Scheme is a smart insurance solution to secure loan liabilities, ensuring financial protection in case of the borrower’s demise. Here’s the following key features and benefits:
| Feature and Benefit | Details |
|---|---|
| Plan Type | Pure Protection Term Insurance Policy |
| Plan Basis | Group Insurance |
| Sum Assured | Minimum: ₹50,000, No Maximum Limit |
| Premium Payment Modes | Monthly, Quarterly, Semi-Annual, Annual, Salary Saving Scheme |
| Premium Payment Duration | Two-thirds of the loan repayment period |
| Medical Examination | Required, with costs borne by the customer |
| Loan Facility | Not available |
| Surrender Value | No surrender value |
| Policy Lapse | If the premium is not paid after the first year, the policy lapses with no benefits |
| Death Benefit | Lump sum sum-assured payout to the nominee |
| Maturity Benefit | No maturity benefits as it is a pure protection plan |
| Tax Benefits | Premiums qualify for deductions under Section 80C; maturity proceeds are tax-free under Section 10(10)D |
What are the Tax Benefits of Home Loan Insurance?
Opting for home loan insurance offers financial security and following tax advantages.
| Tax Benefit | Details |
|---|---|
| Section 80C Deduction | Premiums up to ₹1.5 lakh per year qualify for tax deduction under Section 80C of the Income Tax Act. |
| Eligibility | The deduction applies only if the borrower directly pays the premium and not if it is clubbed with the loan amount. |
| Tax Rules | Benefits are subject to changes in tax laws, so consulting a tax professional is advisable for updated provisions. |
Also Read: Home Loan Tax Benefits
Comparing LIC Home Loan Insurance Policy with Other Top Home Loan Policies in India
When considering home loan insurance policies in India, it’s essential to compare the features and benefits of various options to select the one that best fits your financial needs. Below is a comparison table with other top home loan insurance policies:
| Feature | LIC’s Mortgage Redemption Plan | HDFC Life Home Loan Protection Plan | ICICI Bank Home Loan Insurance |
|---|---|---|---|
| Plan Type | Home Loan Redemption Insurance | Home Loan Protection Plan | Home Loan Insurance |
| Sum Assured | Minimum: ₹50,000; No Maximum Limit | Based on loan amount | Up to ₹3 crore |
| Premium Payment | Single premium | Single premium or limited pay | Single premium or integrated with loan EMIs |
| Coverage | Decreasing cover matching loan balance | Covers outstanding loan amount | Comprehensive cover for individual, home, and contents |
| Eligibility | Borrowers aged 18-60 years | Borrowers aged 18-65 years | Covers primary and co-borrowers |
| Medical Examination | Required; costs borne by customer | May be required based on loan amount | No medical check-up up to certain limits |
| Additional Benefits | Tax benefits under Section 80C | Option to cover critical illness and disability | Add-ons like Secure Mind & Loan Protect |
| Policy Term | Matches loan tenure | Matches loan tenure | Aligns with loan tenure |
How Can a Borrower Claim Home Loan Insurance Due to Sudden Disability?
In case of a sudden disability, borrowers can claim LIC home loan insurance to settle outstanding liabilities and reduce financial stress. Below are the key steps to initiate and process the claim.
- Notify the Insurer – Inform the insurance provider immediately about the disability to initiate the claim process.
- Obtain the Claim Form – Request and fill out the required claim form from the insurer.
- Submit Medical Proof – Provide medical records, a disability certificate from a registered doctor, and any other necessary health documents.
- Provide Policy Documents – Submit the original policy document, proof of identity, and loan details.
- Verification Process – The insurer will review submitted documents and may request additional verification.
- Claim Settlement – Upon successful verification, the insurer settles the outstanding home loan amount directly with the lender.
Read More: Why only 1% of Indians opt for home loan insurance?
Should You Take Home Loan Insurance for the Home Loan?
Taking home loan insurance is a wise decision as it protects your family from financial burdens in case of unforeseen events like disability. It pays off the outstanding loan, securing your home and giving you peace of mind.
Policies like LIC home loan insurance offer coverage that aligns with your loan tenure, reducing risks for both borrowers and lenders. While not mandatory, it adds a crucial safety net to your financial planning.
Read More: Should You Get a Home Loan Insurance?
Conclusion
LIC Home Loan Insurance plays a crucial role in securing your home loan, and ensuring financial stability for you and your family. From loan protection to tax benefits, it offers a comprehensive safety net against unforeseen events.
Choosing the right plan can make a significant difference in managing risks effectively. If you’re looking for expert guidance on home loan solutions, Credit Dharma can help you find the best option tailored to your needs.
Frequently Asked Questions
LIC’s Mortgage Redemption Assurance (MRA) Scheme is a group term assurance plan that covers housing or vehicle loan borrowers. If the borrower passes away, it pays off the outstanding loan, relieving the family from financial burden.
No, enrolling in LIC’s home loan insurance Scheme is not mandatory for home loan borrowers. However, it is advisable as it provides financial protection to the borrower’s family against outstanding loan liabilities in case of unforeseen events.
The coverage under LIC’s MRA Scheme decreases in line with the outstanding loan amount. As the borrower repays the loan through EMIs, the sum assured reduces correspondingly, ensuring that the insurance coverage matches the declining loan liability.
Individuals aged between 18 and 60 years who have availed of housing loans are eligible to enroll in LIC’s MRA Scheme. The minimum term of assurance is 3 years, and the maximum maturity age is 65 years.
No, a medical examination is not required for sums assured up to Rs. 10 lakhs for individuals aged up to 45 years. For higher sums or older individuals, evidence of good health may be necessary, and the cost of medical reports is borne by the borrower.
Yes, existing borrowers can join the scheme within six months of the commencement of the scheme, subject to certain conditions.
In case of premature repayment of the loan, the member has the option to receive a refund of the premium for the unexpired term, as per the terms of the scheme.
Yes, the premium paid for LIC’s MRA Scheme is eligible for tax benefits under Section 80C of the Income Tax Act, subject to prevailing tax laws.
Each lending institution can tailor the scheme, and LIC may include coverage for co-borrowers based on the agreed terms.
If the borrower passes away, the insurer quickly settles the claim with the lender, clearing the outstanding dues and preventing any financial burden on the borrower’s family.
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