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