Dec 9, 2013, 08.00AM IST| Economic Times
Here are five things to know about Home loan protection plan (HLPP):
1. HLPP is an insurance plan which provides a lump sum benefit on the death of the insured. This can be used to repay the outstanding home loan.
2. The cover in an HLPP is usually the same as the loan taken. The premium for HLPP can be paid as a single premium in advance or on an annual basis.
3. Insurance companies also offer an option where the annual premium is clubbed with the Home loan EMI paid by the borrower.
4. Since the value of the outstanding loan reduces over time, the premium for HLPP is lower than that of a life cover for a similar amount.
5. Like a term plan, HLPP does not offer any maturity or survival benefits.