HDFC Loan Cover Term Assurance Plan

Objective

This policy aims to relieve family members from the liability of an outstanding loan, in case of unfortunate death of the insured member.

What does it do?

This plan addresses the concern of home loan repayment in case of unfortunate demise of the breadwinner of the family. Here, the sum assured decreases as the loan is repaid. The policy doesn’t pay any maturity benefit on survival. This plan can be taken either on single-life or joint-life basis. It also offers an optional accelerated sum assured (ASA) benefit that covers 6 critical illnesses for a sum equal to the basic sum insured under the policy. Once this claim is settled, the basic policy cover also ends.

Pros

Decrease in sum assured with decrease in loan liability reduces premium towards the policy, thus saving policyholder from paying for insurance cover that is not required.
Women enjoy lower premium rates.
Premiums paid qualify for taxation benefits.

Cons

Accelerated sum assured benefit covers only 6 critical illnesses.

Suited for

This policy is suitable if you have any outstanding loan or plan to take a loan in future.

Our View

This is a useful policy to protect your family from the burden of repaying a loan. It ensures that they continue living in self-owned house in your absence.
Critical Illness rider makes more sense with a basic health insurance policy. This rider in the policy cannot replace a basic health plan, but bought as an add on to supplement the loan liability.