Why an insurance cover against a home loan is a must?
A home loan protection plan is a traditional decreasing term plan without bonus facility. This plan has been designed to help family repay the outstanding home loan in case of unfortunate death of the life insured.
Death Benefit – Since this is a pure term plan, the corresponding sum assured is paid as a death benefit if the life insured dies during the policy tenure to pay for the outstanding home loan and the policy terminates.
Maturity Benefit – There are no maturity benefits under this plan.
Income Tax Benefit – Life insurance premiums paid up to Rs. 1,00,000 are allowed as a deduction from the taxable income each year under the section. The death benefit is tax-free under section 10(10)D subject to fulfillment of terms and conditions.
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