CHEQUE BOOK

HT Estates - - HTESTATES - Harsh Roongta

I have taken a home loan from a bank. Is it manda­tory to take prop­erty in­sur­ance for a home loan as the bank is in­sist­ing on it?

— Ki­ran Kaka There is no RBI re­quire­ment that makes it manda­tory for you to take prop­erty in­sur­ance when you avail of a home loan. How­ever, banks are free to in­sist that you take an in­sur­ance pol­icy to safe­guard their in­ter­ests as long as it is not com­pul­so­rily linked to buy­ing the in­sur­ance pol­icy through them. There­fore, the bank can in­sist on you tak­ing a prop­erty in­sur­ance so that the amount is payable in the event of dam­age to the prop­erty due to nat­u­ral dis­as­ters such as earth­quake, flood, etc but it can­not in­sist that the in­sur­ance be bought from the com­pany that they rep­re­sent. If the bank in­sists on buy­ing in­sur­ance, you can pur­chase it from any other com­pany.

It is in your in­ter­est to buy prop­erty in­sur­ance and also to pur­chase an ad­di­tional in­sur­ance that cov­ers all the be­long­ings in the house. Also, it is ad­vis­able to go in for a term in­sur­ance plan and a crit­i­cal ill­ness and ac­ci­den­tal dis­abil­ity plan to cover the amount out­stand­ing on your loan ac­count. This will en­sure that you/ your de­pen­dents are not bur­dened with the home loan should any­thing un­to­ward hap­pen to you or the prop­erty.

You will need to as­sign the pol­icy to the len­der. If your len­der does not ac­cept the pol­icy from another in­surer, there are other lenders in the mar­ket who will agree to ac­cept an in­sur­ance pol­icy from another I am 62 years old and have my own busi­ness. Can I get home loan at this age? Some banks have de­clined to lend me due to my age.

— Shankar Prasad Ev­ery bank has its cri­te­ria for as­sess­ing the re­pay­ment ca­pac­ity of the per­son who has taken a loan from them. These in­clude fac­tors such as monthly in­come, other EMI, credit history, age etc. The min­i­mum age re­quire­ment

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