Know the difference in Home Insurance and Home Loan Insuranceby Finway Capital Empowering People Financially
Insurances of all kinds give us an assurance of safety against the unfortunate events of life, whether it is a loan against property, business loan or home loan in Delhi. Today, one must have insurance policies for all the valuables, including homes and home loans. Although both home loan insurance and home insurance are related to your home, the features and benefits are somehow different. In fact, several time insurance buyers get confused between both the products. Both the insurances cover different kinds of risks on your property. And therefore it is essential to have an understanding of both the products.
Difference Between Home Insurance and Home Loan Insurance
Even though both are insurances sound similar, but they serve different purposes. Home insurance keeps the house protected from any kind of damage coming to the home. Also known as homeowner’s insurance, a home loan insurance plan offers coverage of your home and its content. However, if you default on your home loan, the lender has the power to seize your home, as your home insurance does not give you protection.
On the other hand, home loan insurance provides cover for the borrowed amount of home loan against non-repayment of the loan EMIs. It means that home loan insurance is an exclusive insurance plan for the home loan. Another significant difference between a home loan and home construction loan is that the home insurance loan rates are cheaper than home loan insurance policy.
Which is Better
Both home insurance and home loan insurance are necessary for a person who has a home and a home loan. A home insurance price is lesser than a home loan insurance price. Home loan insurance becomes a necessity if your income is not stable. In such cases, one must buy a home loan insurance which covers the disability of the borrower to pay off the loan.
Most of the lenders ask the borrower to buy a loan protection policy as it makes the home loan less risky. If a borrower buys a home loan protection plan for the entire tenure, the chances of Non-performing Asset (NPA) gets equal to NIL. Furthermore, one can achieve a higher amount of loan in this way. And therefore, home insurance is also important as it saves you from being worried about many unprecedented events that can happen to your home. Hence, both home insurance and home loan insurance need to be considered equally important, and one should have both of them.
Created on Mar 23rd 2020 11:01. Viewed 131 times.