How You Can Secure Your Loans?

by Mr. Rituraj Bhattacharya, Bajaj Allianz Life Insurance

You have taken a loan to purchase your dream house, car or home appliances & are repaying it though EMIs.

 But, did you know, that if you were unable to pay off the full amount towards the loan repayment, not only would your family have to bear the burden of the outstanding loan. but, they would also end up losing the prized possession to the bank, despite having partially paid off the loan.

How you can secure your loans?

There is some rigidity that a conventional mortgage plan poses on various aspects.

 

Mr. Rituraj Bhattacharya,
Bajaj Allianz Life Insurance

But a decreasing term cover plan can help you overcome these.

Let's take a look how:

Loan schedules..

 If you choose to secure your loan through a decreasing cover term plan, one can cover their loans that do not require a loan schedule for the cover to kick in.

Such plans allow you to select your rate of interest from a range on the basis of which the sum assured is decided.

This helps to cover multiple loans, in addition to the home loan under a single plan, by taking a cumulative rate of interest and sum assured.

Also, in the situation when interest rates change, you can always top-up the new outstanding loan amount with an additional sum assured.

Cover for small loans..

Mortgage insurance is usually available as a bundled product along with the loan and covers only the loan taken from the bank.

Such products are limited in their features because they are available only if you have taken a housing loan and do not fulfill any other financial objective.

A decreasing cover term plan can be used to cover various kinds of loans, like personal or / consumer loans, in addition to highvalue loans.

Flexibility..

 A decreasing cover term plan would give you the option to select your policy term, premium payment frequency &  rate of interest.

Some products also give you the option to pay premiums in advance, which entitles the policyholder to favourable discounts.

Some life insurers offer decreasing term cover plans on a limited premium payment mode, wherein, the premium needs to be paid only up to two-thirds of the entire policy term.

About the author..

Mr. Rituraj Bhattacharya is  Head-product development and market management at Bajaj Allianz Life Insurance

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