In summary

Term insurance can help your family manage an outstanding home loan if the insured dies during the policy term. The death cover can be used towards the loan, subject to the policy terms and cover amount.

• You can assess the sum assured against your outstanding home loan and other financial responsibilities.
• The policy term can be aligned with the remaining home loan repayment period.
• Your premium depends on factors such as age, cover amount, policy term, health and smoking status.
• Critical illness and accidental death riders can provide additional protection, subject to their terms.
• From April 1, 2026, qualifying life insurance premiums can be considered under Section 123 of the Income Tax Act, 2025, subject to applicable conditions.

Before choosing a policy, compare the cover amount, policy term, premium and applicable riders. Explore term insurance plans to assess coverage that fits your home loan and family's financial needs. Get quote for a suitable plan through Bajaj Finance Insurance Mall.

The insurance payout does not automatically close the home loan. How the claim proceeds are used depends on the policy structure, the beneficiary or assignment arrangement, the outstanding loan and the applicable policy terms.

• Loan repayment support:

The death cover can help your family repay some or all of the outstanding home loan.

The amount available for repayment depends on the sum assured and the loan balance when the claim becomes payable. If the loan balance is higher than the applicable death cover, your family may still need to arrange the remaining amount.

• Lower financial pressure on your family:

A home loan continues to create a financial obligation even after the borrower's death. The insurance payout can give your family funds to manage this liability without relying entirely on regular income or existing savings.

• Cover aligned with your loan:

You can assess the sum assured based on your outstanding loan and remaining repayment period.

Your family's other financial needs also matter. A policy designed only around the home loan may leave less protection for household expenses, education or other liabilities.

• Coverage amount:

Start with the outstanding home loan amount and then consider your family's other financial needs.

For example, if you have a home loan balance of Rs. 50 lakh, a Rs. 50 lakh life cover may address that loan amount but may leave little or no additional cover for household expenses and other liabilities.

The actual cover you need depends on your overall financial responsibilities.

• Policy tenure:

The policy term should cover the period for which the home loan remains a significant financial obligation.

For example, if your home loan has 20 years remaining, assess whether the term insurance policy provides coverage for that period. A shorter policy term can leave a gap while the loan is still outstanding.

• Claim settlement information:

Claim settlement information can be one factor in your comparison, but it should not be the only basis for choosing an insurer.

Check the latest claim-related information published by the insurer and understand what the reported ratio measures before comparing different companies.

• Additional riders:

You can also opt for add-on riders like Critical Illness Benefit and Accidental Death Cover as additional rider options to enhance your coverage.

Check the specific rider's eligibility, exclusions, benefit conditions and additional premium before adding it to your policy.

• Premium affordability:

Your premium should fit within your regular financial commitments throughout the premium-paying period.

When comparing premiums, consider the sum assured, policy term and profile used for the quotation. A lower premium should not be viewed separately from the amount and duration of cover provided.

• Flexibility:

Review the policy terms for provisions that apply if your financial circumstances or loan structure changes.

Check the rules for changes to cover, nomination, assignment and other applicable policy provisions before purchasing.

Compare term insurance plans to review the cover amount, policy term and available rider options for your home loan requirements, and get a quote based on your financial responsibilities.

For example, two borrowers with the same home loan amount may receive different premiums because their ages, health profiles and smoking status differ.

Check your premium estimate using your actual age, required cover and policy term rather than relying on a general premium figure.

Term insurance helps your family manage the outstanding home loan if you die during the policy term. The death cover can provide funds towards the loan, subject to the cover amount, claim and policy terms.

When selecting term insurance for home loan protection, assess the outstanding loan, remaining repayment period and your family's other financial obligations. This helps you determine whether the policy should cover only the home loan or also provide additional financial support.

You should also compare the premium, policy term, sum assured and applicable riders before making a decision. Review the policy document carefully to understand the exclusions, conditions and benefits. Get a quote based on the protection your family may need.