Secure Your Loans with Life Insurance
13th Apr, 2013
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Providing for your family’s needs and wants most definitely means parting with a portion of your income. It becomes worse when the price of products is increasing and you may need to take a loan to procure the same. Then again, the loan needs to be repaid too. In such a case, insuring your loan gives you the assurance that the asset will always be yours, irrespective of any situation that may arise. However, a decreasing term cover may be a better option since it would also help take care of any additional smaller loans that may have been taken by you in the same period.
How a decreasing term cover can secure your loans
There is some rigidity that a conventional mortgage plan poses on various aspects. But a decreasing term cover plan can help you overcome these. Take a look how.
Loan schedules: A prerequisite for a mortgage assurance plan is a loan schedule provided by the lending bank. This loan schedule decides the period over which the loan must be paid off at regular intervals. An easier method of securing your loan is a decreasing cover term plan since it does not require a loan schedule.
Cover for small loans: Mortgage insurance is usually available as a bundled product along with home loans, which covers only the loan taken from the bank and does not fulfill any other financial objective. A decreasing cover term plan, on the other hand, can be used to cover various kinds of loans such as personal or consumer loans, in addition to high value loans. Further, these plans can also help to build a corpus for your child’s education, marriage or retirement.
Flexibility:Since most mortgage insurance plans work according to the pre-decided loan schedule from the bank, they offer very little flexibility. On the other hand, a decreasing cover term plan is free from all such restrictions. Some products also give you the option to pay premiums in advance which entitles the policyholder to favorable discounts or the flexibility of limited premium payment.
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