Life Insurance

The Secret to leaving an Enduring Legacy, not Burden, with Loansurance

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For most of us, with so many dreams to fulfill, it is difficult to wait for long to see various dreams realised. Since many dreams require substantial amounts of money, be it buying a fancy car or unlocking the door of a dream home, you typically fall short of savings. That’s why you need loans like home loans and car loans.

While loans help us to acquire the objects of our desire, we end up having the financial commitment of paying equated monthly instalments (EMI). But there is more to loans than just this. As long as the regular family income is flowing in, meeting the loan repayment commitment is not a bother. However, the story changes remarkably in the event of the sudden death of the family’s primary income earner.

Outstanding loan burden Even in the absence of the primary income earner, EMIs of outstanding loans, along with regular expenses such as groceries, mobile services and school fees, will need to be met by dipping into accumulated savings. This means that after a certain period of time, the savings accumulated for important long-term needs such as the child’s higher education or for retirement will be under threat, putting the future of family members in jeopardy. In extreme cases, the family members might lose possession of the asset acquired with a loan, such as a home.

Clearly, there needs to be a provision in the financial planning process of families to protect family members from the burden of outstanding loans. The most affordable and effective way of doing this is to buy a term plan that covers the outstanding loan amount. They are typically referred to as loan term plans or loansurance.   

Loansurance primer The life insurance money from a loan term plan covers the family for the outstanding loan amount during the plan’s term. This means in the event of an untimely demise, the life insurance money from the plan pays off the outstanding loan. Among the most popular forms of loansurance are those that cover you for home loans, loans against property and loans for plots of land. 

Loansurance advantage For loansurance, you have both group life insurance term plans and individual term plans. You can choose one depending on your situation. You can also opt for a one-time premium or you could pay regular premiums. Of course, you also benefit from the term plan advantage of getting a large life insurance coverage at the most affordable premium. 

Loansurance plans typically provide you with the option of declining life insurance which moves in tandem with your declining loan repayment liability. Or, you could opt for an option where the life insurance coverage remains the same i.e. level term cover. Life insurance companies also offer life insurance coverage for an individual borrower or a joint borrower. Multiple borrowers are also covered with life insurance coverage in proportion to their loan liability. If your property is under construction, you can also get coverage for the period you are waiting for your property’s possession.

Clearly, loansurance or loan term plans help you reach out for your dreams with loans, secure in your thought that your family’s future is well protected in case of any eventuality. This is much like a batsman in the game of cricket going for a big hit, secure in the thought of protective gear providing adequate protection.

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