How Life Insurance Helps in Getting a Home Loan?

Buying your dream home can seem like a daunting task with rising prices of land and houses everywhere. It requires careful planning of your current financial status and assets. Help is present, of course, in the form of home loans. With a promise of regular EMIs, you can always get a home loan to purchase your home.

How Life Insurance Helps in Getting a Home Loan?

There are a few ways in which a life insurance helps in getting a home loan:

1. Ease of Getting a Loan

If you have a life insurance plan, it is easier for you to apply and avail of a home loan. This is because a person who is insured poses far less financial risk than someone who is not. The one who is loaning out the amount knows they will have a way to receive the debt even if the person dies before returning the entirety of the borrowed amount. Therefore, make sure to buy a life insurance plan to stay secure as well as have an easier time applying and getting loans.

Also Read:- How Much Additional Life Insurance Coverage Do You Need?

2. Financial Security for Your Family

In case you die before repaying your loan, your family will have to fulfil the debts. Now, this can be quite burdensome, especially if you took out a big loan. It can also be problematic if you have other important and draining financial obligations like growing children or ailing family members. Life insurance helps in such cases.

The death benefit received by your nominees will significantly help them out in repaying your debts. This is also applicable in case you are suddenly subjected to any disability. You can also opt for a disability cover which will help you with expenses related to your disability.

3. Security for Assets

Benefits from a life insurance plan ensure that your assets remain secure even after your death. If the family members are unable to repay the loan, your assets may be seized to compensate for the debt owed. However, if you have a life insurance purchased, the insurance company will help these assets, which might even be the very home you had purchased, remain in the possession of your family.

4. Tax Benefits

One of the biggest reasons why people purchase life insurance plans is to avail themselves of the tax benefits that come with it. Under section 80C of the Income Tax Act, you can claim tax deductions on the amount of premium you pay for your life insurance.

You May Also Like to Read:- When Should I Purchase a Term Insurance Plan?

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Endnotes

As is evident, therefore, your home loan has an intricate connection with your life insurance plan. Moreover, these are helpful connections that will only add to your benefits. Purchase a life insurance plan before getting a home loan, for security and ease!