Insurance with Home Loan

[Expert]

Hi All,

I am buying a new home, for this new home I am taking home loan. Now my home advisor is saying me that I need to buy two insurance - One Home Insurance and another term insurance for myself. Is it so?

Please Advice.

Home Insurance - Would cover the home from Risks such as Fire, earth-quack etc.This is basic policy and premium is also not very high (60 Paise for 1,00,000/- Sum Insured)

Term Insurance - This would cover the loan taker. If due to some mis happening to the loan taker - the loan taker is unable to earn or pay (Like disablement or death), then the policy would pay the unpaid loan amount to the bank from where the loan has taken.

I would suggest to go for both the policies. Please also take care of below points -

• Don't take Term Insurance with the loan (provider which is selling you the loan), but take independently from LIC and keep premium mode annual. It will be cheaper for you.
• Home Insurance - Take only basic Fire Policy with earth-quack cover and go for long term policy eg. 10 years. You will save 50% of the total premium by this way.

[collen]

Both of this insurance are good enough for the assurance of your property. This will help you be more prepared whatever tear of your belongings. Before settling with the insurance follow through the details before having it.