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Group life insurance with home loan: Things you should always keep in mind

To lure a loan borrower to also buy an insurance product at one go, the lender may offer a slight discount on the interest rate. Should that lure you to purchase the bundled arrangement?

Insurance

When you apply for a home loan, the lender is most likely to bundle life cover. The product is meant to cover the payment of loan amount, in case of untimely death of the borrower. To encourage a borrower to buy this group insurance product, some lenders may be willing to offer a marginally lower interest rate as well. The cover, in principle, sounds good because a borrower needs to have some insurance when taking a loan. This is to ensure that there are no hardships if the borrower passes away. However, there are other options of getting this cover as well – for example, term ...