Life insurance: You can buy reducing term insurance to cover your home loan

By: | Updated: September 13, 2018 4:54 PM

A life insurance policy is considered as a contract and all the terms and conditions at the time of purchase are considered sacrosanct.

Life insurance, home loan, term insurance, housing loan, Aditya Birla Sun Life Insurance, life insurance policiesA life insurance policy for your child is anytime beneficial for generating savings that can be utilised for his education or cover his life itself.

Pankaj Razdan

Is it mandatory to buy a new life insurance policy while taking a housing loan? Can I show my current life insurance policies instead to the banker?
—Akhil Kumar

It is not mandatory to purchase a policy at the time of taking a housing loan. However, it is advisable to opt for one as it will cover your home loan liability while ensuring that the burden does not fall on your family in case of an untoward event. Though not compulsory, you can either purchase a new policy or can assign an existing life insurance policy to the bank providing a cover to your home loan. However, you can opt for a reducing term cover plan where the sum assured decreases in line with the loan outstanding.

Three years back I had taken an online life insurance policy from a private insurance company disclosing my smoking habit. Now I have quit smoking completely. Will the company reduce the premium if I give it in writing that I have quit smoking?
—Madhav Mehta

A life insurance policy is considered as a contract and all the terms and conditions at the time of purchase are considered sacrosanct. Since your premiums were decided at the time of purchase, the same cannot be changed now.

Since my son is going abroad for higher studies for four years, should I buy a single premium life insurance policy for him?
—Vineet Mittal

A life insurance policy for your child is anytime beneficial for generating savings that can be utilised for his education or cover his life itself. However, the one you opt for will solely depend upon the outcome that you are looking for. It is possible for you to purchase a single premium plan for your son.

I have lost my policy document. How can I get the maturity proceeds now?
—Ashutosh Dixit

You should immediately write to your insurer requesting for a duplicate policy bond or copy. The duplicate copy can be used in lieu of the original policy document to receive the maturity amount.

The writer is MD & CEO, Aditya Birla Sun Life Insurance and Dy. CEO, Aditya Birla Capital. Send your queries to fepersonal finance@expressindia.com

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