Advantage Homesurance® Protection Plan
Maximum protection at minimum cost
Full Cover during Construction Period
Many a times, the property might be under construction and though the loan is sanctioned, it is disbursed in stages depending upon the construction schedule. During the construction period, the IDBI Federal Homesurance® Protection Plan covers the full sanctioned amount of your home loan and not just the outstanding loan which will be lower because of part disbursements.
Full cover during the construction period ensures that the family is assured of the home even if the loan is not fully disbursed. If death occurs during the construction period, we pay the full sanctioned loan amount. Part of the payment can be used to pay off the partly disbursed loan amount and the balance can be used to pay the remaining amount due to the builder.
Protection for fixed as well as floating rate home loans
The Homesurance® Protection Plan covers fixed rate as well as floating rate home loans. When interest rate increases, your outstanding loan amount may increase compared to what was earlier expected. The Homesurance® Protection Plan pays the higher of your policy schedule or the actual outstanding loan amount. Thus, even if the outstanding loan amount increases due to hike in interest rates and consequent increase in EMI, you will be covered for the liability.
Similarly when interest rate decreases, your outstanding loan amount may reduce compared to what was earlier expected. If the outstanding loan amount reduces due to a reduction in interest rates, we will pay the policy schedule amount even if it is higher. The outstanding loan liability can thus be paid off and the balance amount will go to your nominees.
Joint Life Cover for co-borrowers#
If there are co-borrowers in a home loan, you can insure both lives by opting for a joint life cover. Joint life cover also costs less than taking individual covers for both lives. If any one of the co-borrowers unfortunately dies, the Homesurance® Protection Plan will pay the full insured amount. Thus, the full loan liability can be paid off upon death of any one of the co-borrowers so that there is no burden on the family and the surviving co-borrowers.
#Joint life cover can be taken provided both parties have insurable interest in each other.
Fixed Period Coverage
If you do not wish to have insurance cover for the entire loan term, you can opt for a limited period cover of 10 years. For the first 10 years from commencement of the plan, you will have the cover after which it will cease. Fixed period coverage is available only if your home loan term is 15 years or more.
Easy Premium Payment
The Homesurance® Protection Plan offers flexible premium payment options to suit your convenience. You can choose to pay your premium in 3, 5 or 10 annual installments. You can also pay up to 2 premiums in advance by commuting them at a discount. The discount rate will be determined by the company from time to time. You can thus reduce your premium by paying in advance.Your home loan bank or housing finance company may also fund the premium payable by increasing the loan amount to that extent. In that case, you do not have to pay the premium separately and your EMI will increase slightly to cover the premium.
Small cost, big protection
The Homesurance® Protection Plan can cover your entire home loan for a small cost. The premium you pay depends upon your age, gender, loan amount and loan term. Illustrative premiums for a healthy male aged 30 are given below (assuming loan interest rate of 12%).
||20 years |
|Annual Premium for 3-pay
||Rs 10,060 |
|Annual Premium for 5-pay
||Rs 6,070 |
Under Section 80C of the Income Tax Act, 1961, the premiums you pay towards your policy are eligible for deduction from your income to the extent of 10% of the actual capital sum assured*, subject to a limit of Rs. 1,00,000 per year.
Under Section 10(10D) of the Income Tax Act, 1961, the benefits you will receive under your policy will qualify for tax exemption, provided the premiums payable in any of the years during the policy term do not exceed 10% of the actual capital sum assured*. In case this condition is not fulfilled, the benefits you will receive will be subject to tax. However, the death benefit is tax-free under Section 10 (10D) of the Income Tax Act, 1961.
You are advised to consult your tax advisor for details. Please note that tax laws may change from time to time, and tax benefits applicable will be as per prevailing tax laws.
*Actual Capital Sum Assured:
It is the minimum amount assured under the policy on death at any time during the term of the policy, not taking into account the value of any premium agreed to be returned or any benefit by way of bonus or otherwise which is to be received by any person under the policy over and above the sum actually assured.
Homesurance® Protection Plan at a Glance