Importance Of Term Plan If You Have A Home Loan

You and your family always aspired for your own dream house and you must have fulfilled this dream of yours. But to fulfill this dream you might have taken a home loan. This outstanding loan amount and the interest rate may be the main cause of your worry right now! However, apart from the loan amount, there is another worry. If you are the breadwinner of the family, who will repay your loan if you meet with an unfortunate event in the future. You wouldn’t want your spouse or your parents to be struggling with the financial burden of loan EMIs. While you can do little about the increasing loan rates, the good news is that you can ensure your family is not paralyzed by this financial liability.

One way you can ensure that your family is financially secured and stable to pay your loan EMIs is by opting for a term plan that will provide them with financial protection. Apart from home loan, a term plan with adequate cover with adequate cover will also provide your family with financial aid to pay for daily expenses, education, car/house maintenance, etc.

For example, if you are the sole earning member of the family and you have a Home loan of Rs 50 lakhs, you can opt for a sum assured of Rs 1 crore. You can customize your payout option which can be a combination of both lumpsum and monthly. So you can choose Rs 50 lakhs as a lumpsum payout and Rs 50 lakhs as monthly payout. Now, your spouse can utilize that lumpsum amount to repay the loan amount and the monthly amount as an income replacement to handle the daily expenses without any worries.

It is recommended that your sum assured should be 10x times more than your annual income. For comprehensive protection, you can also add an accidental total and permanent disability rider which will cover permanent disabilities in case you meet with an accident.

In this way, a few thousand per year will help you secure your home, financially protect your family and also provide you with peace of mind.