What is the Importance of Term Insurance for Mortgage?

When it comes to homeownership, one of the most significant financial commitments is a mortgage loan. Protecting this investment is crucial for the well-being of both homeowners and their families. Term insurance plays a vital role in safeguarding your mortgage, offering financial security in the face of unforeseen circumstances.

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Note: Know more about what is term life insurance first before reading this article.

How are Term Plans and Mortage Related to Each Other?

These both terms together mean that if, in the tenure of the loan payment, any unfortunate event happens with the borrower due to which they are not able to work, specific to a disability, accident, illness, death, or job loss because of other reasons- the insurance will help pay off the loan to their family and secure them from debt.

The family members can use the money financed in the term insurance for a home loan to complete the loan payment, ensuring a secure future for their loved ones when there is no steady income flow.

Term Plans

₹1
Crore

Life Cover

@ Starting from ₹ 13/day⁺

₹50
LAKH

Life Cover

@ Starting from ₹ 8/day⁺

₹75
LAKH

Life Cover

@ Starting from ₹ 12/day⁺

Why Term Insurance is the Best Option in Paying Off Mortage Loan?

Do you have a home loan with term insurance? If, Yes. Let’s discuss the importance of term insurance for mortgage insurance protection and why it should be a priority for homeowners.

Mortgage Insurance Coverage and Peace of Mind: A term insurance policy provides a safety net for your mortgage. In the event of your untimely demise during the policy term, the death benefit can be used to pay off the remaining mortgage balance. This ensures that your loved ones can keep the family home and avoid the risk of foreclosure. With term insurance, you can enjoy peace of mind, knowing that your mortgage is protected and your family's future is secure.
Financial Stability for Your Family: Losing a family member is emotionally devastating and can create financial challenges. With term insurance, your family will have the financial stability they need to cope with the loss. The death benefit received from the policy can be used to cover daily expenses, maintain their lifestyle, and meet future financial goals. It acts as a financial safety net, allowing your loved ones to navigate challenging times without the burden of mortgage payments.
Debt Repayment and Legacy Protection: Term insurance covers your mortgage and ensures that your family is not burdened with outstanding debts. In addition to the mortgage, the death benefit can be used to settle other debts, such as personal loans or credit card balances. By protecting your loved ones from inheriting your financial liabilities, term insurance preserves your legacy and provides a fresh start for your family.
Affordable Premiums and Flexibility: One of the important benefits of term insurance is its affordability. Compared to other life insurance policies, term insurance offers coverage for a specific term without a cash value component. This affordability allows homeowners to obtain sufficient coverage to protect their mortgage without straining their budget. Moreover, term insurance policies are flexible, allowing you to choose the coverage amount and term length that best aligns with your mortgage and financial needs.
Adaptability to Changing Circumstances: As time passes, your mortgage balance will decrease, and your financial situation may change. Term insurance offers flexibility in adjusting your coverage as needed. You can review your policy periodically and modify the coverage amount to match the remaining mortgage debt. This adaptability ensures that you are adequately protected throughout the duration of your mortgage.

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Wrapping It Up!

Term insurance is an essential tool for mortgage protection, offering homeowners and their families financial security and peace of mind. By covering your mortgage loan and providing a safety net for your loved ones, term insurance ensures that your family can keep their home, maintain stability, and avoid financial hardships. With affordable premiums and flexibility, term insurance is the best way to protect your financial legacy and the well-being of those you care about most. Prioritizing term insurance for mortgage insurance protection is a decision that can bring long-term security and comfort to your family.

Note: You can easily calculate the term plan premium by using the term insurance premium calculator online tool.

Note: Check out the best term life insurance in India and choose one that suits your requirements.

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˜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

Rs. 400/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. 400/month (Rs.13/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.

+Rs. 230 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. 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. 12/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. 497/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. 487/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. 626/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. 905/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. 1,267/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.

*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. 447/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.679/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. 910/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. 1,924month 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.

Women

+Rs. 400/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, rounded off to nearest 10.

Rs. 461/month is the starting price for a 1 crore term life insurance for an 24 year-old female, non-smoker, with no pre-existing diseases, cover upto 54 years of age.

1,642/month is the starting price for a 1 crore term life insurance for an 44 year-old female, non-smoker, with no pre-existing diseases, cover upto 74 years of age.

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

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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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