Home loan insurance is a crucial financial protection plan that helps secure your loan against unforeseen events such as death, disability, accidents, loss of income, or property damage. It ensures that your family or dependents are not burdened with outstanding repayments during financially difficult situations. Home loan insurance is also known as Home Loan Protection Plan (HLPP) or mortgage loan insurance. This specialised insurance plan covers the outstanding home loan amount if something unexpected happens to the borrower, such as untimely death, accidental disability, or terminal illness, as per the policy terms and conditions.
Since buying your dream home is one of the biggest financial investments and commitments, it is important to get home loan insurance. It helps pay off the outstanding loan amount in unforeseen situations, such as accidental disability, death, natural disasters, or income interruptions, which can affect the ability to repay the loan.
Home loan insurance is important because it provides:
Home loan insurance is especially beneficial for the following entities:
When you take a home loan of ₹50 Lakhs for 20 years, you are committing ₹40,000–₹50,000 per month in EMIs. If something happens to you mid-tenure, that EMI burden falls on your family, often forcing them to sell the very home you bought for them. Home loan insurance eliminates that risk entirely.
Example: Rahul, age 32, takes a ₹60 Lakh home loan for 25 years. He buys an HLPP for a single premium of ₹42,000. 8 years later, Ramesh passes away. The insurer pays the bank the full outstanding balance (approximately ₹52 Lakhs).
Let us take a look at the best home loan insurance plans available in India
| Best Home Loan Insurance in India | Entry Age | Max. Maturity Age | CSR | Sum Assured |
| HDFC Click 2 Protect Supreme - Life Goal | 18 years | 85 years | 99.7% | No Limit |
| Tata AIA SRS Credit Protect | 18 – 65 years | 95 years | 99.4% | 1 Crore |
| Aviva Life Signature 3D Term Platinum - Credit Protect | 18 – 65 years | 70 years | 99.1% | 25 Lacs - 5 Crores |
Disclaimer: +₹360/month is the starting price for a ₹99 lakhs loan cover with an 8% interest rate for an 18-year-old male, non-smoker, with no pre-existing diseases, loan tenure up to 20 years, rounded off to the nearest 10.
Home loan protection in India is broadly covered through three types of plans, each addressing a different kind of risk:
Bharat Griha Raksha policy is a standard home insurance policy that protects the insured house against property damage risks such as fire, flood, earthquake, storm & cyclone, landslide, riots & strike, and various other calamities. Basically, it is a property insurance policy that protects the physical structure of the house during the home loan tenure.
BGR policy plays an important role in home loan insurance because the house remains mortgaged or hypothecated to the lender until the home loan is fully repaid.
If the insured property gets damaged due to an unforeseen calamity, the financial burden of repairing or rebuilding the house can be disturbing for the homeowner, while the home loan EMIs may still continue. In such situations, Bharat Griha Raksha home insurance policy helps by covering the repair or reconstruction expenses of the damaged property, thereby protecting both the borrower and the lender from major financial losses. That is why many lenders or banks recommend home insurance policy coverage along with home loan protection plans.
Who Should Buy It? Homeowners who want to financially protect their property against structural damage and natural disasters.
Credit Protect is a life insurance-based home loan protection plan that helps repay the outstanding home loan if the borrower passes away during the policy tenure.
If the insured borrower dies during the loan tenure, the insurer pays the outstanding loan amount to the bank or lender, reducing the financial burden on the family.
Single-earning members, Long-term home loan borrowers, Families dependent on one primary income source.
Home Loan Secure Plan – Loan & EMI Protection Against Accidents
A home loan secure plan is a comprehensive borrower protection plan designed to protect the insured against accidental financial risks that may affect the insured's ability to repay the loan. This plan is built on Personal Accident (PA) insurance coverage and focuses on providing the following benefits in a single plan:
Reducing Balance Plan (Reducing cover): The most common and affordable option, where the sum assured decreases over time in line with the outstanding home loan balance.
Level Cover Plan: In a Level cover plan, the cover amount remains fixed throughout the entire term of the home loan.
Hybrid Cover Plan: This plan combines both, offering a fixed level of coverage for a specific initial period (e.g., for the first few years) before transitioning to a reducing cover structure as the loan progresses.
Group Insurance plan: Group insurance plan can act as a home loan insurance plan (also known as a group loan protection plan), but not all group plans are home loan plans. Banks typically use group insurance to cover borrowers' outstanding loans in case of death or disability, ensuring the debt is settled.
Home loan insurance not only protects your family from financial burden but also offers tax advantages under the Income Tax Act, 1961.
Section 80C Deduction
The premium paid towards a home loan protection plan is eligible for tax deduction under Section 80C of the Income Tax Act, up to a limit of ₹1.5 lakh per financial year. This deduction is available to the policyholder or borrower who pays the premium.
Section 10(10D)
In the event of the insured borrower's death, the benefit paid to the nominee is generally tax-free under Section 10(10D), subject to applicable conditions.
Important Note: Tax benefits are subject to changes in tax laws. It is advisable to consult a tax professional or CA before making a purchase decision solely based on tax saving.
What to Choose: Reducing Cover Vs Level Cover
Reducing Cover
Level Cover
This type of home loan insurance typically offers comprehensive accident-linked financial protection through the following benefits:
The Loan Secure benefit helps protect the borrower's family from outstanding home loan liabilities in the event of severe accidents. Under this feature, the insurer pays the outstanding home loan amount if the insured borrower suffers accidental death, Permanent Total Disability (PTD), or Permanent Partial Disability (PPD), as per policy terms & conditions. This benefit ensures that the borrower's dependent is not burdened with unpaid loan obligations during financially difficult times.
EMI Protect is one of the most important features of a Home Loan Secure Plan. This benefit helps continue EMI payments if the insured borrower becomes disabled due to an accident and temporarily loses earning capability. The insurer pays the EMIs for a specified period as per the policy schedule.
This feature provides financial protection if the insured borrower dies due to an accident during the policy tenure. The benefit amount may be used to repay outstanding loan liability, support surviving family members, and maintain financial stability during tough times. This accidental death protection is especially important for borrowers who are the family's primary earners.
Permanent Total Disability refers to situations where the insured becomes completely disabled due to an accident and is permanently unable to work or earn income. This offers coverage for: Loss of both limbs, Total loss of eyesight, Paralysis, Other permanent disabling injuries covered under the policy. Under PTD cover, the insurer provides compensation in accordance with the policy terms, which helps repay the loan or meet financial commitments.
Permanent Partial Disability refers to partial but irreversible loss of physical function caused by an accident. This offers coverage for: Loss of one limb, Loss of fingers, Partial loss of eyesight, Permanent loss of hearing in one ear. Under PPD coverage, compensation is paid based on the severity of the disability, and the payout percentage depends on the policy terms and the disability schedule.
Many Home Loan Secure plans may also include supplementary accident-related covers, such as: Hospital Cash Benefit – It provides a fixed daily cash allowance during hospitalisation due to an accident. Accident Medical Expenses – It covers medical treatment expenses arising from accidental injuries, subject to policy terms. Air Ambulance Cover – It provides emergency transportation support during critical accidental medical situations.
The premiums under Home Loan Secure plan are often determined based on occupational risk categories. The insurer classifies occupations into three main risk categories.
Risk Category 1 – Low Risk Occupations
It includes office-based and non-hazardous jobs such as:
Risk Category 2 – Moderate Risk Occupations
It includes occupations with some outdoor exposure or field work, such as:
These occupations may attract moderate premium rates.
Risk Category 3 – High Risk Occupations
It includes hazardous occupations such as:
These occupations have higher accidental exposure and may lead to higher premium rates.
The below table highlights the difference between types of home loans:
| Home Loan Insurance Type | Coverage & Protection | Trigger Point |
| Bharat Griha Raksha (BGR) Policy | Protects the home structure against fire, flood, earthquake, and other natural calamities | Damage to the insured property due to natural or man-made calamities |
| Credit Protect | Protects the outstanding home loan amount through natural death cover | Death of the insured borrower during policy tenure |
| Home Loan Secure Plan | Protects loan repayment ability through accident, disability, and EMI support benefits | Accidental death, disability, or income interruption affecting EMI repayment |
*Disclaimer: The above table includes general information. The key features & benefits will be according to the policy wording.
The following reasons explain the importance of home loan insurance policy for homeowners in India:
The claim process for home loan insurance typically involves:
Step 1 : Inform the provider immediately after any unfortunate event strikes.
Step 2: Submitting required documents. This might vary from provider to provider.
Step 3: Verification by the provider by checking all the required documents.
Step 4: At last, settlement of the outstanding loan amount directly with the lender.
The premium for home loan insurance depends on several factors, such as:
Note: The insurer may ask for other documents depending on their requirements.
The table below highlights the difference between home loan insurance & home insurance policy:
This means paying the policyholder's remaining or outstanding loan amount if an unforeseen circumstance does not allow them to repay the loan.
This means paying the financial loss or damage caused to the insured home structure or its contents due to several unforeseen risks.
Coverage
Helps in paying the outstanding loan amount in case of any casualty to the policyholder.
Helps in securing the insured home structure and the household items from various risks defined in the policy wordings.
Down Payment
It minimises the down payment (EMIs) on your house.
No impact.
Purchase Process
You can only buy it if you already have a home insurance policy.
It can be purchased regardless of whether the individual has a home loan.
A home loan insurance calculator is an online tool that helps borrowers estimate the premium amount for protecting their home loan against unforeseen risks such as death, accidental disability, EMI interruption, or property damage. The calculator provides an approximate premium based on multiple factors, such as:
By using a home loan insurance calculator, borrowers can easily compare different coverage options, understand premium affordability, choose suitable protection benefits, and estimate the cost of securing their home loan. Using this calculator before purchasing home loan insurance helps borrowers make informed financial decisions and choose the right level of protection for their home loan obligations.
Most borrowers think of home loan insurance purely as personal protection. But there is an equally important perspective on the lender's side that explains why banks actively recommend it.
When a borrower takes a home loan, the lender carries significant financial risk across a tenure that can span 15 to 30 years. If the borrower passes away or becomes permanently disabled, the lender faces the risk of loan default and the complex, time-consuming process of recovering the outstanding amount, which may include legal proceedings or property auction.
Home loan insurance eliminates this risk for the lender by ensuring the outstanding loan balance is settled directly by the insurer. This is why many banks recommend or bundle home loan insurance with the loan at the time of disbursal.
Yes. If you have taken a joint home loan with a co-borrower, such as a spouse or a parent, a single home loan insurance policy can be structured to cover both borrowers under the same plan.
This is particularly relevant because in joint home loans, both borrowers share repayment responsibility. If one borrower passes away, the entire EMI burden shifts to the surviving borrower, which can cause significant financial strain.
Home loan insurance plans offer flexible premium payment structures to suit different borrower preferences and financial situations.
Single Premium
The entire premium is paid as a one-time lump sum at the time of policy purchase. This is the most common structure when the insurance is bundled with a home loan at disbursal. While convenient, borrowers should note that if the loan is prepaid or foreclosed, a proportionate refund of the unused premium may or may not be available depending on the insurer's policy.
Adding Premium to EMI
Some lenders allow the insurance premium to be added to the home loan amount itself, meaning it gets incorporated into the monthly EMI. While this is convenient, it also means you pay interest on the insurance premium as part of the loan, increasing the overall cost. Borrowers should evaluate this carefully before opting in.
A standard home loan insurance plan covers the outstanding loan in the event of death. However, life's uncertainties go beyond just death. Riders and add-on covers allow you to extend the scope of your protection at an additional premium. The riders are:
Here is how you can buy the best home loan insurance in India from Policybazaar:
Step 1: Visit the term insurance for home loan page of Policybazaar
Step 2: Fill in your name, gender, and other contact details
Step 3: Select the right annual income, educational qualifications, occupation type, and smoking habits
Step 4: Choose the best home loan insurance policy in India and proceed to pay the premiums
Home loan insurance is an important financial protection plan that protects borrowers and their families from financial stress caused by unforeseen events such as death, disability, accidents, or property damage during the loan tenure. With coverage options like Bharat Griha Raksha (BGR) policy, Credit Protect, and Home Loan Secure Plan, borrowers can safeguard their home, outstanding loan, and EMI obligations while ensuring better financial security and peace of mind at the same time.
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Read more˜The insurers/plans mentioned are arranged in order of highest to lowest Sum Assured(SA) offered by Policybazaar’s insurer partners offering term insurance plans on our platform, as per ‘first year premium of life insurers as at 31.03.2025 report’ published by IRDAI.
Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. For complete list of insurers in India refer to the IRDAI website www.irdai.gov.in
+On the basis of your profile
+Rs. 410/month is starting price for a 1 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10
+Rs. 410/month (Rs.14/day) is starting price for a 1 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age rounded off to nearest 10
+Rs. 245 is starting price for a 50 lakhs term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.
+Rs. 8/day is starting price for a 50 lakhs term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10
+Rs. 15/day is starting price for a 75 lakhs term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10
+Rs. 504/month is starting price for a 1.5 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.
+Rs. 494/month is starting price for a 2 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.
+Rs. 636/month is starting price for a 3 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.
+Rs. 918/month is starting price for a 5 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.
+Rs. 1,286/month is starting price for a 7 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.
+Rs. 453/month is starting price for a 1 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.
+Rs.582/month is starting price for a 2 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.
+Rs. 786/month is starting price for a 3 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.
+Rs. 1,374/month is starting price for a 5 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.
+Rs. 1,592/month is starting price for a 7 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.
+Rs. 525/month is the starting price for a 1 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 68 years of age.
+Rs. 668/month is starting price for a 2 crore term life insurance for an 25 year-old male, non-smoker, with no pre-existing diseases, cover upto 45 years of age.
+Rs. 1,200/month is starting price for a 2 crore term life insurance for an 35 year-old male, non-smoker, with no pre-existing diseases, cover upto 55 years of age.
+Rs. 410/month is starting price for a 1 crore term life insurance for an 18 year-old Female, non-smoker, with no pre-existing diseases, cover upto 30 years of age.
+Rs. 577/month is starting price for a 1 crore term life insurance for an 18 year-old Male, self employed, non-smoker, with no pre-existing diseases, cover upto 30 years of age.
*The full refund of premium is available on availing the one-time option of refund of premium. Total premium paid for policy (paid for add-ons) will be the special exit value, payable on availing the one-time option of refund of premium if you wish to completely exit the policy.
+Rs. ₹361/month is the starting price for a ₹1 crore loan cover with an 8% interest rate for an 18-year-old male, non-smoker, with no pre-existing diseases, loan tenure up to 20 years, rounded off to the nearest 10
Prices offered by the insurer are as per the approved insurance plans | #All savings and online discounts are provided by insurers as per IRDAI approved insurance plans | Standard Terms and Conditions Apply | **Tax Benefits are subject to changes in tax laws.| Policybazaar Insurance Brokers Private Limited
We will respond in the first instance within 30 minutes of the customers contacting us. 30-minute claim support service is for the purpose of giving reasonable assistance to the policyholder in pursuance of the claim. Settlement of claim (including cashless claim) is the responsibility of the insurer as per policy terms and conditions. The 30-minute claim support is subject to our operations not being impacted by a system failure or force majeure event or for reasons beyond our control. For further details, 24x7 Claims Support Helpline can be reached out at 1800-258-5881
For more details on risk factors, terms and conditions, please read the sales brochure carefully before concluding a sale
Policybazaar Insurance Brokers Private Limited | CIN: U74999HR2014PTC053454 | Registered Office - Plot No.119, Sector - 44, Gurgaon, Haryana – 122001 | Registration No. 742, Valid till 09/06/2027, License category- Composite Broker Visitors are hereby informed that their information submitted on the website may be shared with insurers. Product information is authentic and solely based on the information received from the insurers.
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