Nowadays the lending institutions fetch a Group Credit Life Policy that covers any eventualities to the borrower. Check with the institutions before the money is spent on such insurance.
iprotect of icici and iterm of aegeon religare are both available online and offer term plan at dirt cheap rates...the term plan of lic seems to be exhorbitant when you compare them...but whethe aegon or icici will really pay if need arises...??? has anyone got these plan..
Bogus article which works in favour of the bank or lending institution. The writer fails to emphasize the fact that the lending institution will only cover the outstanding principle in the event of the loanees death. For example, if the outstanding loan amount of a 70L house is say 40L and if the repayer dies, the institution will close out the loan for 40L.
On the other hand, if you take a term-insurance for say 70L, then the survivors would get 70L (and thus ending up with an extra 30L). Needless to say, if the person survives the term (of the insurance), they get none of the money back - but heck, term insurance is not some investment plan; it just a way of safegaurding your interest.
There was a similar article in yday's (11/25) ET which provided a more balanced view on the pros and cons of taking term-insurance vs home loan protection plans from your lender.
Re: Term Insurance
by prasanna krishnan on Nov 26, 2010 10:10 AM
pray, does the premium in both the cases remain the same? and if you do want to take a life insurance, then why buy a house. life insurance and housing loan combined is like a rider as per my knowledge. eg; by paying rs 25 per month as additional premium, you can add on an additional rider of specific risk coverage like cancer etc. who would take a separate policy for only cancer coverage?:)
Re: Term Insurance
by Jai Babu on Nov 26, 2010 10:00 AM
The best way to cover the liability of a Housing loan is to take a separate Term or PURE Life Policy to cover loan amount. Term Insurance, also known as pure life cover, is the cheapest and the simplest form of insurance. Under this insurance policy, against payment of regular premium, the insurer agrees to pay your beneficiaries the sum assured in event of your premature death. However, if you survive till the end of the policy term, nothing is payable to you. This policy has no savings component and the premiums you pay are purely a cost to buy you life cover. I had taken a loan of 10lakhs in 1999 when I bought my first house. The loan tenure was 10yrs. I took a Term Insurance of 25lakhs. The premium was very reasonable @ 3,500 per year ie about Rs. 10 per day. Comfortable is it not? Nowadays there are pure life plans available with additional Accidental Death, Permanent Disabilty and Critical Illness benefits for a small additional premium to Pure Life Plans. Visit the websites of any major Insurance company for ready reckoners. Look at SIPs and Mutual Funds and Equity for Investment. Cheers
Re: Re: Term Insurance
by praveeniv on Nov 26, 2010 10:11 AM
..and don't fall for TROP (Term Insurance with return of policy) - it just hikes up the premimum unnecessarily and does not give any specific benefit. Pure term insurance is the best way to protect against unforseen circumstances. It's not pushed in India too much due to two factors - (a) The cut for the policy agent is significantly low for term insurance and hence agents don't go about advt this (b) Many ppl view term insurance as a sink-bin which does not return the premium if the policy holder outlives the term.
Re: Re: Re: Term Insurance
by Jai Babu on Nov 26, 2010 10:49 AM
Well said Praveen. Agents are reluctant to push pure life policies. In fact many agents push Insurance as INVESTMENT. Equities, Mutual Funds, SIPs, Realty, FDs & Gold consistetnly outperform Insurance linked investment. Evey young person with a family & dependents should have a pure life policy between 50lakhs to a crore. The premium per year would be approx between Rs6000-12,000 i.e. @ maximum Rs1000 per month for a coverage of 1 crore.
Re: Seems To Be A Good Idea
by Ramdas Nayak on Nov 26, 2010 10:18 AM
Every insurance appears good and insurance company looks very friendly only till there is no claim. Once the insurer exits from the world these companies show hell to survivors. Be careful while choosing the right Insurance Company.
Please be careful, when you take this insurance to cover your housing loan. Please read the terms and conditions. I had taken an insurance to cover my loan through ICICI. They covered that money ( premium) too , in the loan amount. With good faith, I had signed the doucuments etc and the premium was @3.5 Lakh for 40 Lakh. When I received the policy , I noticed that the policy was only for 5 years not till the term of the loan. Moreover, by interet rate change etc., the loan amount only would only be increasing or the terms would be increasing ( these are the gimmicks / magics of ICICI) . IN 5 years period one may not really go gor any type of claim. Hence, the premium we pay may go waste. When I noticed this and approached the ICICI Bank, they themselves were astonished to note that the period is only for 5 years. So plese be careful while taking this . All the best.
Re: INsurance throuh ICICI
by abh m on Nov 26, 2010 09:28 AM
All private banks are one way or other way cheating common man.If you search in google you will find that these kind of experiences are not just you alone. Beware of dealing with such banks.Pass this information to all you know
Re: INsurance throuh ICICI
by Jai Babu on Nov 26, 2010 09:57 AM
The best way to cover the liability of a Housing loan is to take a separate Term or PURE Life Policy to cover loan amount. Term Insurance, also known as pure life cover, is the cheapest and the simplest form of insurance. Under this insurance policy, against payment of regular premium, the insurer agrees to pay your beneficiaries the sum assured in event of your premature death. However, if you survive till the end of the policy term, nothing is payable to you. This policy has no savings component and the premiums you pay are purely a cost to buy you life cover. I had taken a loan of 10lakhs in 1999 when I bought my first house. The loan tenure was 10yrs. I took a Term Insurance of 25lakhs. The premium was very reasonable @ 3,500 per year ie about Rs. 10 per day. Comfortable is it not? Nowadays there are pure life plans available with additional Accidental Death, Permanent Disabilty and Critical Illness benefits for a small additional premium to Pure Life Plans. Visit the websites of any major Indurance company for ready reckoners. Cheers
Re: INsurance throuh ICICI
by Jai Babu on Nov 26, 2010 09:58 AM
The best way to cover the liability of a Housing loan is to take a separate Term or PURE Life Policy to cover loan amount. Term Insurance, also known as pure life cover, is the cheapest and the simplest form of insurance. Under this insurance policy, against payment of regular premium, the insurer agrees to pay your beneficiaries the sum assured in event of your premature death. However, if you survive till the end of the policy term, nothing is payable to you. This policy has no savings component and the premiums you pay are purely a cost to buy you life cover. I had taken a loan of 10lakhs in 1999 when I bought my first house. The loan tenure was 10yrs. I took a Term Insurance of 25lakhs. The premium was very reasonable @ 3,500 per year ie about Rs. 10 per day. Comfortable is it not? Nowadays there are pure life plans available with additional Accidental Death, Permanent Disabilty and Critical Illness benefits for a small additional premium to Pure Life Plans. Visit the websites of any major Indurance company for ready reckoners. Cheers
Re: INsurance throuh ICICI
by Jai Babu on Nov 26, 2010 09:58 AM
The best way to cover the liability of a Housing loan is to take a separate Term or PURE Life Policy to cover loan amount. Term Insurance, also known as pure life cover, is the cheapest and the simplest form of insurance. Under this insurance policy, against payment of regular premium, the insurer agrees to pay your beneficiaries the sum assured in event of your premature death. However, if you survive till the end of the policy term, nothing is payable to you. This policy has no savings component and the premiums you pay are purely a cost to buy you life cover. I had taken a loan of 10lakhs in 1999 when I bought my first house. The loan tenure was 10yrs. I took a Term Insurance of 25lakhs. The premium was very reasonable @ 3,500 per year ie about Rs. 10 per day. Comfortable is it not? Nowadays there are pure life plans available with additional Accidental Death, Permanent Disabilty and Critical Illness benefits for a small additional premium to Pure Life Plans. Visit the websites of any major Indurance company for ready reckoners. Cheers
