Don't let bank compel you to buy insurance policy with home loan

Instead of taking an agent's word, do your own research on policy benefits and obligations

The Finance Ministry recently pulled up public sector banks (PSBs) for mis-selling insurance products. The Central Vigilance Commission has cautioned against the forced selling of insurance, saying the lure of commissions from their sale could affect the quality of loans.

While the government and its arms take steps to prevent mis-selling, buyers must practise caution.

Avoid package deals

Bankers may make purchasing an insurance policy a condition for sanctioning a home loan. Sometimes, they even add the premium amount to the loan. The borrower then not only pays interest on the home loan but also on the funds borrowed to