Home loan insurance, also known as mortgage insurance, has become immensely popular in today’s world due to the increasing prices of properties. Market experts call it a useful scheme as it ensures that the home loan is paid without burdening the family in case of demise.
Amid the current ongoing pandemic, it makes sense to see if home loan insurance schemes cover COVID-19.
The direct answer to this is Yes.
According to Naval Goel, founder and CEO, PolicyX.com, new provisions have been introduced into the insurance sector due to the drastic impact on human lives by the pandemic. This tells that home loan insurance is also a part of death that occurred due to COVID-19 Infection.
"All non-life insurance company is providing this service and the rule is applicable at nominal premium payout. This new provision is helpful for the people or families who are affected by the second wave of COVID-19. This will help them in paying their home loan without feeling the financial burden," Goel said.
However, it’s essential to note that the coverage will be given only under certain circumstances.
According to Rakesh Goyal, director, Probus Insurance -- an insurtech broking company -- the coverage of COVID-19 highly depends on the coverage of the plan and this would highly vary from insurer to insurer.
“For example, all the policies cover the death of the insured and settles the outstanding loan. However, not all policies would cover events such as income loss unless the policy document mentions this event as covered. But if the borrower gets infected by COVID-19, the policies covering critical illness can offer relief in such cases; considering that it is mentioned in the policy document," Goyal explained.
Since the events in their lives are unpredictable, most people tend to secure their future along with the future of their loved ones with the help of home loan insurance.
This plan, like any other insurance plan, offers financial protection during an unprecedented situation such as critical illness, job loss, disability, death, etc. Under this insurance plan, the insurance company settles the outstanding amount of the bank loan if the above situations arise in the insured's life.
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(Edited by : Jomy Jos Pullokaran)