Is your lender asking you to buy insurance while taking home loan?
Financial Express
Sunil Dhawan
While taking a home loan from a bank or from any other lending institution, one may be asked to buy an insurance policy as well. The lender will, typically, want to ensure that the loan amount is repaid in the event of the death of the borrower before the outstanding loan is paid off. In fact, it is always better to make sure that the loan liability is adequately covered through an insurance plan. However, buying insurance from the lender is not compulsory.
Banks generally offer a single premium insurance plan equal to the amount of loan amount. To make the deal lucrative, some banks may add the amount of premium to the loan amount resulting in a small increase in EMI.
