Home vs Home Loan vs Term Insurance
Which one should you buy?
Firstly, let's get the basics right. What do each one of them stand for, and how can they help?
With home loan insurance, the quantum of the cover is linked to the loan amount. You will get the sum assured to the extent of the loan amount. You must check your liabilities before deciding between home loan insurance and term insurance. However, home loan insurance only covers the outstanding loan amount. As a result, when you repay the loan over the course of the policy, the sum insured will decline until it is zero.
Home insurance differs from home loan insurance as the former covers your building structure, belongings inside your house, or both, depending on the policy. Typically, it protects your home and belongings from damage or loss due to natural calamity, theft, etc.
A term plan is a comprehensive cover that offers a fixed death benefit which you can utilize for any need. (Things to keep in mind before buying a term plan: https://lu.ma/p/QuSka3436Zv4eKJ/10-Major-Death-Cases-where-your-Term-Plan-might-not-help-you)
If your liability merely extends to your home loan, then you can consider buying home loan insurance as the sum assured decreases based on the reduction in outstanding loan.
However, it's best to avoid home loan insurance and buy a term plan instead. Home Insurance can be taken based on locality and probability of destruction due to natural calamity or due to theft.
Cheers!
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