Insure Your Home Loan
You always dream of owning a house. Most of us go ahead and even borrow the required funds to meet our dreams. But, have you ever thought of an unfortunate situation in which you would be unable to pay the outstanding loan amount. You would certainly not want to put the burden of repaying the outstanding loan on your dependent family members. There’s help at hand in the form of insurance cover on payment of a small premium.
Prospective home loan borrowers have something to cheer about in this festive season. Housing finance players are out to woo them by lowering lending rates. They have all geared up to cash the increased flow of money in people’s pockets in the next two months or so. Housing Development Finance Corporation (HDFC) has lowered its floating interest rates on new home loans by 0.75 percentage points to 10.50% for a limited period. State Bank of India (SBI), too, announced similar concessions for fresh home loan borrowers in Kolkata. SBI is offering the scheme only at its home mela held in Kolkata.
With the prices of property soaring high, the home loan facility has enabled many to acquire their house which otherwise would have taken them years to accomplish. If you have bought your home through a loan, apart from home insurance it is important to insure your loan too!
One of the largest financial comittments you are ever likely to make is a home loan. Wouldn’t it be great to have the peace of mind of knowing that should you unfortunately pass away or suffer a permanent disability, your family will be able to keep their home because your home loan will be repaid?
There Are Two Ways to Insure the Structure of Your Home
Replacement Cost
Insurance that pays the policyholder the cost of replacing the damaged property without deduction for depreciation, but limited to a maximum dollar amount.
Guaranteed Replacement Cost
Insurance that pays the full cost of replacing damaged property, without a deduction for depreciation and without a dollar limit. This coverage is not available in all states and some companies limit the coverage to 120 percent of the cost of rebuilding your home. This gives you protection against such things as a sudden increase in construction costs due to a shortage of building materials.
Perhaps, it is one reason why a few of HFCs have put the onus, of protecting the property, on the home loan seekers, while some others are said to be giving the householder’s insurance initially free of cost.
