Written By: Sahil Singh Kathait

Sahil Singh Kathait

Health & Term Insurance

A boy-in-squares bagging escapades of switching streets in groove & sensing musical airy-notes from 6 1". Under wayed nyctophile sketching the walls of life from the panorama of anime.

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Reviewed By: Sharan Gurve

Sharan Gurve

Term & Health Insurance

Sharan Gurve has spent over 9 years in the insurance and finance industries to gather end-to-end knowledge in health and term insurance. His in-house skill development programs and interactive workshops have worked wonders in our B2C domain.

Updated on Mar 11, 2026 4 min read

Term Insurance for Home Loan: Everything You Need To Know

To make the dream of building a house into a reality takes a lot of planning. Many individuals opt for a home loan and pay the EMIs using their salaries. But, in case something happens to them and the family income is lost, their family might not be able to pay for the home loan, and in return, the lender of the loan may procure the property.

Considering this, you can either buy a term plan with a higher coverage so that your family can pay the home loan using the sum assured and keep the rest for their survival or you can link your term insurance policy with your home loan where a part of the premium paid goes towards paying the EMI of the loan. Thus, as the policy continues, the loan keeps on decreasing.

Why Should I Use My Term Policy to Secure My Home Loan

Whether you’re scared to burden your family with debt repayment or you’re the sole earning member of your family, buying a term plan makes complete sense. Your family may not be able to pay the EMIs after your demise, resulting in the lender repossessing the property. This is where a term plan can help you. While you pay your premiums for your term plan, these premiums will keep on decreasing your loan. And, at the end of the policy, your loan will be paid off. Your nominees will receive the sum assured minus the loan amount.

How Much Term Insurance is Required in the Case of a Home Loan

Safeguarding the family against any outstanding loans is the main objective of buying a home loan linked with term insurance. However, you must take into account your family’s future needs and home loan amount while choosing a sufficient cover. It is always advisable to get coverage of up to 10 to 12 times extra of your annual income and the outstanding sum of the home loan. For instance, Bhanu is a 30-year-old man with an annual income of Rs. 8 lacs along with an outstanding loan of 40 lacs. In that case, the adequate life cover should be 1.5 Crore (8 Lacs x 10 = 80 Lacs + 40 Lacs).

Why Term Plans Are Best for Home Loans

Term plans hold a cheaper premium compared to other insurance plans, making them a popular choice among policy buyers. Though loan providers offer home loan protection policies, most policyholders prefer to opt for a term plan instead due to its many benefits over a home loan protection plan.

Here, we’ve listed the benefits of term insurance for home loans.

Conclusion

Many of us are unaware of the benefits of opting for term insurance for housing loans. By doing so, you can secure the dream of owning your house. By getting term insurance linked with a home loan, you can protect your home loan EMIs as well as safeguard your family – all of this can be done under a term plan.

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