Mortgage Life Insurance India

Mortgage Life Insurance India

If you take out a mortgage life insurance policy, the balance of your mortgage would be paid off in the event of your death. This type of insurance protects your family from losing their home if you were to die. As the balance owed on your mortgage goes down, the amount of coverage on the policy also decreases.

Mortgage Life Insurance can help care for your family's financial situation by paying off the outstanding balance of the mortgage on your home with a cash sum should you die before the end of the term of your policy. The level of coverage decreases in line with a standard repayment mortgage, so you are only paying for the life cover your require.

You can take out Mortgage Life Insurance on a single or joint life basis, with the cash sum being paid out on the first claim only. You choose the number of years the policy will be in place and the level of mortgage life cover your require at the outset of the policy. Critical Illness benefit can also be added to most mortgage life insurance policies for an increased premium. By adding Critical Illness benefit the policy will pay out either on death or the diagnosis of a specified critical illness, whichever occurs first.

Protecting your home and family

A life insurance policy can protect your family from the financial obligations of making mortgage payments without your salary. In the event of your death, your family will still be accountable for mortgage payments, which may be unaffordable without your contribution.

To protect your family from bearing such a burden and possibly losing the house, we recommend purchasing a life insurance policy. Although there are other insurance options, such as mortgage protection insurance, the wisest and most economically sound choice, is to buy a life insurance policy.

The death benefit of your life insurance policy should include the amount of your mortgage. In the event of your death, the policy's proceeds will cover the entire cost of your mortgage, your house will be paid off, and your family will have one less thing to worry about.

The alternative to mortgage protection insurance

If taking out a mortgage has already substantially cut into your finances, life insurance is even more important. Although your mortgage payments may make paying premiums for a whole life insurance policy unimaginable, there are cheaper options.

As an alternative to purchasing a permanent life insurance policy or mortgage protection insurance, explore the option of buying a term insurance policy for the same duration as your mortgage. This alternative is much less costly. The premiums will be considerably lower, but the coverage will remain the same.

At the end of the policy's life, you can then decide whether you want to renew or convert the policy or if you would rather discontinue the policy. This approach guarantees mortgage protection at the lowest cost.