Owning a home is a crucial financial decision that one has to make keeping in mind multiple factors such as savings, earnings, investments etc. Moreover, with the steep rise in property prices in most Indian cities, buying a home is the biggest challenge. As a buyer, if you overcome this challenge with a home loan, the next hurdle is to safeguard the home loan against any untimely mishappenings. This is where term insurance comes into the picture, which serves not only as a life cover for you but also as a home loan cover.

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What is Term Insurance, and what are its benefits?
Before we explore further, it is essential that you understand what term insurance is. It is a policy that offers financial coverage in the form of a particular sum of money to the nominee of the insured person, if and when the respective person dies with the policy being active. The term insurance, as the name goes by, provides financial protection only for a certain period such as 20 or 30 years. In addition, a term insurance policy also has numerous benefits, some of which are:

• Affordable life coverage - Unlike other life insurance plans, a term insurance policy has a considerably reasonable premium that can be easily paid by individuals from a mid-level income group. Hence, getting term insurance can bring peace of mind without causing any financial or economic stress on your income.
• Fixed Benefits - Term insurance policies offer a specific amount to the nominee upon the demise of the insured person anytime within the specified term. Unlike a loan protection plan, here the goal is to safeguard the life of insurer along with the home loan.
• Live Cover During Home Loan Transfer - In case of home loan transfers from one financial institution to another, there is no need to re-apply for the term insurance because the home loan cover will remain intact even with a change in the lender. Moreover, a term plan also protects you after your home loan has been repaid before the stipulated time.

How to Choose Term Insurance Policy?
It is imperative to all look into the factors that influence a term insurance policy for your home loan cover.

• Premium cost - The premium is the most critical part of insurance policy because this amount is what you have to pay regularly to keep your home loan cover going. In addition, the cost of the premium of the insurance also helps you decide if the policy is financially viable for you or not.
• Tenure - There are numerous options of term insurance policies that provide varied life covers such as 20 or 30 years. Before choosing term insurance, one has to be careful to take into account maximum time that can be needed to pay the home loan off.
• Modifying the cover - Most home loans get into the arena of tenure extension or refinance, so it is crucial that as a borrower you are opting for such term insurance that offers seamless and commensurate flexibility in term duration.
• Tax benefits - Home loans are a form of investment that can save your taxes. Similarly, the premiums paid in the term insurance also act as tax saving investment, which is why you must be well aware of the tax intricacies to avail the tax benefits of both home loan as well as term insurance.
• Add-ons - In most term insurance policies, there are certain add-ons along with the basic life cover. Therefore, you need to choose plans with those add-ons that serves your purpose.

Why should one get a Home Loan Cover?
Home loans are a form of a long-term contract between the borrower and lender, usually a financial institution. In every home loan, there is an assumption that the borrower will have a regular income that would suffice the amount of EMI that has to be paid every month. The period of home loan stretches from 20-30 years, but life is uncertain, which is why at the occurrence of any misfortune with the borrower the financial burden will be cushioned with the help of a home loan cover. With the proceeds of the insurance, the family of the borrower would be able to repay the outstanding loan amount, thereby securing the house.

*Tax benefits are subject to conditions and other provisions of the Indian tax laws and are subject to amendments made thereto from time to time.