Your bank will push its own loan-protection plan with the home loan. It's usually not your best option. Here's the math and the smarter alternative.
Share your loan amount and term cover on WhatsApp; we'll tell you in plain numbers whether you're covered.
📅 Book a Free Call 💬 WhatsApp Us| Bank's loan protection | Own term plan | |
|---|---|---|
| Cover | Shrinks as loan reduces | Stays full till you choose |
| Payout goes to | Bank first | Your family (they pay the loan, keep the rest) |
| Portability | Dies if you switch banks | Stays with you regardless |
| Cost | Often bundled at higher effective rates | Usually cheaper for the same cover |
Some term plans offer loan-protection variants where cover reduces with a schedule. They're fine, but a plain level term plan is simpler, more flexible, and usually cheaper. Complexity rarely pays in insurance.
No — banks cannot force you to buy their insurance with a home loan (IRDAI/MFI guidelines). It may be strongly suggested, but it's optional. Your own term cover is the better substitute.
Term insurance, in most cases: the payout goes to your family (not the bank), cover doesn't shrink, and it stays valid if you change lenders. It's usually cheaper too.
Outstanding loan amount plus 12–15× annual income for family needs, minus existing assets. A ₹50L loan on ₹15LPA income → roughly ₹2.5Cr total cover.
The liability passes to co-borrowers/legal heirs. The bank can enforce against the property. This is precisely the scenario term insurance prevents.
Try it yourself: open the matching calculator →