Mortgage insurance’s relevance in India
By Joseph Samson
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Mortgage/home loan Insurance is increasingly becoming popular in the Indian Mortgage Industry. Mortgage insurance is a special type of insurance that guarantees repayment in the event of demise or disability of the borrower. The tenure of such a policy is usually 12 months, but can be longer in some cases.

Most home buyers, by the time they have received possession would have exhausted all their short-term savings. While they have a real estate asset, they are also saddled with a huge long-term liability. Seldom people think about the difficult time that their dependents might have to go through if they die.

How does it cover your liabilities?

Loan insurance covers are designed to take care of various liabilities, in case the policyholder dies. These covers are not only attached to home loans but also to auto loans, personal loans and education loans. However such a cover is more relevant in case of home loan due to its long tenure.

Mortgage covers function exactly like a simple term plan, except that the sum assured keeps decreasing with the amount owed to the lender. These are single premium plans where the entire premium is paid upfront while buying the policy.

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