What are the different types of mortgage insurance?
In India, what are the different types of mortgage insurance comes in various forms to cater to different needs and scenarios. Here are the main types of mortgage insurance you’ll find:
1. Level Cover Plan
This plan keeps the coverage amount constant throughout the loan tenure. No matter how much you’ve paid back, the insurance coverage remains the same.
2. Hybrid Cover Plan
The coverage is full during the initial period, usually the first year. After that, it starts reducing as the balance amount decreases with the loan tenure.
3. Reducing Cover Plan
Both the coverage and the outstanding loan amount reduce over the tenure. As you pay off the loan, the insurance coverage decreases accordingly.
These plans are designed to match your repayment schedule and provide a safety net for both you and the lender. Choosing the right type depends on your financial goals, your loan’s structure, and how you plan to manage your finances over the years.
Remember, mortgage insurance is a tool to protect your dream of homeownership. It ensures that your home will remain with your family, even if you face unexpected events that affect your ability to pay the loan.
