Home loan insurance, also called a Home Loan Protection Plan (HLPP) or mortgage loan insurance, is a life insurance policy that pays off your entire outstanding home loan to the bank if you die, become permanently disabled, or are diagnosed with a critical illness during the loan tenure. Without it, your family must continue paying EMIs or risk losing the home to the bank. With a home loan insurance plan, the insurer settles the loan directly — your family keeps the home, debt-free.
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Home Loan Insurance or mortgage loan insurance, is a type of protection plan designed to cover your outstanding home loan debt in case of your unforeseen death, job loss, or other critical events such as disability or critical illness (according to policy terms). This home loan insurance ensures that the borrower's family does not have to bear the financial burden of EMIs or risk losing the house. You can use the home loan insurance calculator to check the applicable EMI and premiums for your home loan.
Is HLPP mandatory? No, As per RBI and IRDAI guidelines, home loan insurance is voluntary. Lenders cannot force you to buy from a specific insurer- you can compare and buy independently.
Some borrowers also combine this with a term insurance policy to offer wider financial security for their family beyond just the home loan.
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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 purpose, tenure, and coverage of the home loan insurance plans:
What is the Purpose of Home Loan Insurance?
The primary goal of home loan insurance is to secure the family of a borrower and lender by making sure the outstanding loan amount is repaid in case the borrower faces an unforeseen death, disability, or in some cases, job loss or critical illness. This safety net prevents the monthly EMI burden and makes sure the house is not seized because of non-payment.
What is the coverage period of mortgage loan insurance?
The coverage period of this credit life insurance mainly coincides with the home loan tenure i.e., around 15-30 years. Let’s say if the home loan is for 30 years, the tenure of the home loan insurance plan will also be 30 years.
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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.
This plan offers a high life cover amount to safeguard the financial future of your family against unforeseen demise.
Option to select from different options such as Life, Extra Life, Income, and Extra income to match your financial needs.
It offers optional add-ons such as critical illness, and accidental death benefits to increase protection.
If the policyholder suffers from disability, future premiums may be waived.
Easy online purchase and plan servicing with fast issuance and lower premium rates because of online processing.
The plan has an inbuilt Payor Accelerator Benefit that pays up to 50% of the effective sum assured on the diagnosis of a terminal illness
No additional benefit is payable in case the policyholder survives the policy term.
The death benefit payable will be the effective sum assured as on the date of death.
You can choose to pay the premiums in a regular or limited premium pay term as per your convenience.
In case of policy surrender, the Unexpired Risk Premium Value is paid to the policyholder.
The plan offers financial protection to your loved ones in the event of the death of the policyholder during the policy term by paying off the remaining loan.
This is a decreasing term insurance plan where the cover reduces with the outstanding loan amount, throughout the policy term.
You can choose the base sum assured and policy term suited to your needs as per the details of the availed loan.
A sum at risk schedule is created at the start, showing how the coverage reduces each year. The reduction in cover is calculated on an assumed yearly repayment basis using a fixed interest rate of 11% per annum, regardless of your actual loan terms.
The death benefit starts equal to the base sum assured and reduces yearly as per the schedule, which means it may not always exactly match your actual outstanding loan amount.
In case of the insured’s death during the policy term, the sum at risk for that specific year, as mentioned in the policy schedule, is paid, and the policy ends.
A home loan insurance plan in India 2026 offers a financial net for your family and co-borrowers. Here is a list of key benefits of home loan insurance cover:
Complete Protection
If something unexpected happens to the borrower, such as death, disability, or a serious illness, the insurer settles the remaining loan. This helps ensure your family is not burdened with EMIs or at risk of losing their home.
Affordable Premiums Online
Buying home loan insurance online can help you save on premiums compared to traditional offline options. You can also use a calculator to understand costs and choose what fits your budget.
Flexible Policy Tenure
The policy duration usually matches your home loan term, so you stay covered throughout the repayment period without needing to track separate timelines.
Option to Add Critical Illness Cover
Many plans allow you to add critical illness cover. If diagnosed with a serious condition, the policy can take care of the loan, easing financial stress during recovery.
Premium Payment Choices
You can choose to pay the premium as a one-time amount or include it in your EMIs, making it easier to manage alongside your loan.
Joint Borrower Coverage: This policy is suitable for loans taken with a parent or a spouse. Both individuals can be covered under a single plan.
Tax Benefits
Premiums paid for home loan protection insurance are eligible for deduction under section 80C of the Income Tax Act, 1961.
Disclaimer: Tax Benefits are subject to change as per the prevailing income tax laws.
Below are the reasons that explains the importance of a home loan insurance policy for homeowners in India:
Protects your family from Loan Burden
A key reason to opt for home loan insurance is the financial protection it offers your loved ones. In case of the policyholder’s untimely death, the policy ensures that the outstanding loan is taken care of, so the family is not left with repayment obligations. This helps them avoid financial stress and the risk of losing their home during a difficult phase.
EMI burden stops immediately on claim settlement
Banks, NBFCs, and housing finance companies aim to reduce the risk of loan defaults. Home loan insurance supports this by covering the remaining loan amount if the borrower is unable to repay, thereby securing the lender’s investment and lowering the chances of non-payment.
Provides Financial Stability
Without home loan insurance, your family may find it difficult to continue paying EMIs, especially if you are the primary earner. This policy reduces that burden by ensuring the loan is settled, helping maintain your family’s financial stability even in unforeseen circumstances.
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.
Reducing Cover
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Level Cover
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A home loan calculator is a smart financial online tool that helps calculate your monthly EMI on the basis of loan amount, home loan interest rates, and duration. It allows you to plan your finances in a manageable way by comparing different cases of loan, adjusting variables, and learning the loan’s total cost over time.
This home loan insurance calculator is mainly beneficial before applying for a home loan or buying home loan insurance, as it gives a clear picture on cost-effectiveness and helps avoid over-borrowing. Using the home loan EMI calculator makes your decisions informed and aligned with the capacity of your repayment.
An EMI calculator works by taking your loan amount, loan repayment term, and interest rate into account. By considering these factors, you can get the applicable premiums based on your profile for online and offline home loan insurance.
Let us understand with the help of an example:
Suppose Karan has taken a home loan for 1 Crore at 7.8% interest rate for a term of 20 years. Here are the steps he would need to follow to get his home loan insurance premium rates:
Step 1: Karan would visit the home loan insurance calculator page of Policybazaar.
Step 2: He would enter his loan details like loan amount, interest rate, and tenure.
Step 3: By clicking on ‘Check Premium’, he could see the applicable premium and the ideal cover for his home loan insurance.
Step 4: He can also check his online and offline loan insurance premiums payable per month and lifetime.
These are two completely different products. Many people confuse them. Here’s exactly how they differ so you can make the right decision.
| Home Loan Insurance | Home Loan Insurance | Home Insurance (Property Insurance) |
| Covers the borrower's life, pays the outstanding loan if borrower dies or is disabled | Covers the physical property - fire, flood, earthquake, theft, structural damage | |
| Also called | HLPP Mortgage protection Credit life insurance Home loan term insurance |
Property Insurance Home owner insurance |
| What does it cover? | Borrower’s death Permanent disability Critical illness |
Fire Flood Earthquake Theft Natural Disasters |
| Who receives payout? | Family (nominee) | Property owner (for repair or rebuild costs) |
| Mandatory? | No - voluntary as per RBI/IRDAI | No |
| Tax Benefit | Yes - Section 80C up to ₹1.5lacs/year | No direct section 80C deduction |
| Starting cost | Around Rs 300 | Around Rs. 500 |
Expert Tip: Buy both. Home loan insurance protects your family from the debt burden if you die. Home insurance protects the physical structure from damage. They are complementary- having one does not substitute for the other.
Here is the table displaying the difference in premiums Karan would have to pay for online and offline home loan insurance plans:
| Premium mode | Online Home Loan Insurance | Offline Home Loan Insurance |
| Monthly Premium | ₹1.16K | ₹2.5 K |
| Lifetime Payment | ₹2.8 Lac | ₹6.02 Lac |
| You can save ₹3.21 Lac with Loan Insurance Online | ||
The above table displays that the premiums for online home loan insurance are much lower than those for offline home loan insurance plans.
| Section | Benefit | Limit | Applicable Regime |
| Section 80C | Premium deduction on HLPP / life insurance | ₹1.5 Lakh/year | Old Tax Regime only |
| Section 10(10D) | Death benefit completely tax-free | No limit | Both regimes |
| Section 80D | Critical illness rider premium deduction | ₹25,000/year | Old Tax Regime only |
| Section 24(b) | Home loan interest deduction | ₹2 Lakh/year | Old Tax Regime |
In India, house insurance usually covers the structure of your home and your belongings against risks like fire, theft, or natural damage. If you also have a loan on the property, many people pair this with home loan insurance so both the house and the liability stay protected.
RBI does not make insurance compulsory with a home loan. A lender can recommend a home loan insurance policy, but the borrower typically has the freedom to choose whether they want that cover and from which insurer.
A housing loan insurance plan is meant to protect your family from the burden of repaying the loan if something happens to the borrower. It helps ensure the home stays secure even during unexpected life events.
No, it is generally optional. While banks often suggest it for added safety, home loan insurance is more of a financial protection tool than a mandatory loan condition.
These are two different layers of protection. Home insurance covers the physical property, while loan protection ensures the outstanding balance gets settled if the borrower faces an unfortunate event. Together, they create a stronger safety net.
This is simply another way of referring to protection linked to your borrowing. In the case of a house loan, it works similarly to mortgage insurance, helping secure the unpaid amount.
Home loan insurance can be particularly useful for:
Families that rely on a single source of income
Borrowers opting for long repayment tenures
Co-borrowers share the responsibility of loan repayment
Self-employed individuals with irregular or variable income
Individuals who do not have sufficient life insurance coverage
Both term insurance and home loan insurance protect your family from the financial burden of an unpaid loan. However, both kinds of plans work differently.
A term insurance plan offers financial security to your family, and the payout can be used to clear the home loan or meet any other expenses.
In contrast, a home loan insurance policy is specifically designed to cover your outstanding loan amount.
While home loan insurance directly repays the lender, term insurance gives your nominee the freedom to decide how to use the claim amount.
For long-term flexibility and wider protection, term insurance often proves to be a more beneficial option.
Yes, you can absolutely avail your existing term insurance as security for your housing loan.
You only have to transfer your policy to your lender or inform them in writing.
Then your lender will have the first charge over your claim entitlement to the extent of your loan outstanding, and then the balance will be paid to your nominee, if any.
To ensure that your home loan insurance is covered, it is recommended that you assign members of your family as your nominees and they can use your benefit payment to pay off your remaining loan and then spend the rest to cover their needs.
Expert Tip: This is advisable as it is relatively affordable since you won't have to purchase another home loan insurance policy, your existing term insurance policy will cover all your family’s needs and your loan.
Let’s understand the difference between home loan insurance and term insurance in detail:
| Features | Home Loan Insurance | Term Insurance |
| Type of coverage | Decreasing. Coverage matches with the balance of loan | Fixed. It remains constant |
| Purpose | Only covers the outstanding debt | Covers debt and offers family security |
| Premium | Generally paid as lump sum payment that is sometimes added to loan | Paid as monthly/yearly and it is affordable |
| Sum Assured | Reduces over time | Fixed throughout the plan |
Here is how you can plan the ideal home loan insurance policy cover amount:
Home Loan EMI Calculator: You can use this system to quickly identify the total credit for your mortgage (EMI) on a monthly basis as well as your total amount left on your loan. With the actual amount you owe, you can also find out how much insurance coverage you need on your mortgage so that your family is protected if an event occurs during the period of the loan.
Term Insurance Calculator: This calculator will estimate the term insurance premium based on the required coverage for your family's financial needs, including home loans, daily expenses, children's education, and long-term goals. It helps you see how much additional protection you require beyond your home loan insurance.
Plan Comprehensive Protection: Combining home loan insurance policy with a term insurance plan ensures your home and overall family finances are secure. You may go through the best term insurance plans to find the one that would complement your home loan coverage and provide comprehensive financial security for your loved ones.
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
Buying home loan insurance online offers convenience, transparency, and better control over your choices:
Upto 72% lower prices
Online platforms allow easy comparison, helping you find more cost-effective plans
Easy Plan Comparison
Compare coverage, features, and insurers in one place to choose what fits your loan
Simplified Purchase Process
Minimal documentation with faster application and approval
Transparent Policy Details
Clear details on policy benefits, terms, and exclusions before purchase
Convenient Policy Management
Online policyholders can easily track their coverage, access policy documents, and manage premium payments through digital accounts.
For many borrowers, purchasing home loan insurance online offers a convenient way to secure their housing loan while comparing options from multiple insurers.
The premium for a home loan insurance plan is not the same for every borrower. Insurance companies calculate the cost of the policy based on several personal and loan related factors. Understanding these elements can help you estimate your premium more accurately when using a home loan insurance calculator and choose a cover that fits your financial planning.
Age of the Borrower
Your age has a big impact on the premium. Younger borrowers usually pay less because the health risk is lower, while premiums may go up with age.
Loan Amount
A bigger home loan means a higher cover amount under the policy. Since the insurer is covering a larger loan, the premium is usually higher too.
Loan Tenure
The longer your loan term, the longer the insurer needs to provide protection. Because of this, a longer tenure can slightly raise the premium.
Health and Lifestyle
Habits like smoking or existing medical conditions can increase the premium, as insurers assess your health risk before issuing the cover.
Add-on Riders
Extra benefits like critical illness, disability, or job loss cover make the plan more comprehensive, but they can also slightly increase the premium.
Understanding these factors allows borrowers to make better decisions while selecting a suitable home loan insurance policy.
The home loan insurance claim process involves 2 steps:
Intimate the Claim & Submit Documents
The nominee informs the insurer about the claim and submits required documents such as the claim form, death/medical certificate, KYC details, and loan-related documents.
Verification & Settlement
After reviewing the claim, the insurer pays the outstanding loan amount directly to the lender. Any excess amount, if applicable, is paid to the nominee.
When evaluating home loan insurance options, Policybazaar home loan insurance review allows borrowers to check home loan plans that have:
Up to 72% lower cost as compared to single premium insurance products.
Individual life insurance may also offer 0% GST benefits (as applicable), unlike group life insurance covers that typically attract 18% GST.
Another key benefit is flexibility where borrowers can select coverage aligned with the unpaid loan amount at any given time, making sure more tailored financial protection.
Varun has spent years in the insurance space, but what drives him isn't policies or premiums — it's the conversations he's had with real people. A young father in Pune wondering if his salary is enough. A newly married couple in Jaipur putting off "the insurance talk" for later. A mother in Chennai who never knew her husband was underinsured until it was too late.
These stories stay with him.
As Head of Term Insurance at Policybazaar, Varun knows the numbers well — 52.4% of Indians are aware of term insurance, yet only 9.6% own it. And 87% of families don't realise they're leaving their loved ones with far less protection than they actually need. But behind every statistic, he sees a family that just needed someone to sit with them, explain it simply, and help them take that one step.
That's exactly what Policybazaar's term insurance is built to do.
In his words, "Most people aren't avoiding protection — they're just waiting for someone to make it easy. That's what we're here for."
˜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. ₹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
+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
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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˜ Policybazaar Promise reflects the guarantee offered by insurers. Price assurance is based on certifications shared by insurers with us.
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