Home Loan Protection Plan (HLPP) Overview
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Questions and Answers

What benefit does a Home Loan Protection Plan provide in the event of the death of the insured?

  • Future loan payments are waived based on the terms
  • The insured's family receives a cash payout of $100,000
  • Only medical expenses are covered
  • The outstanding loan amount is repaid and the loan is closed (correct)

    • Which scenario would allow for a lump sum payment under a Home Loan Protection Plan?

  • The insured is diagnosed with a terminal illness (correct)
  • The insured takes early retirement
  • The insured suffers from a minor injury
  • The insured misses loan payments

    • What happens if the insured becomes totally or permanently disabled according to the Home Loan Protection Plan?

  • The loan is automatically forgiven
  • Loan repayments increase due to added fees
  • Insurance may cover the outstanding loan amount or waive future premiums (correct)
  • The insured must continue to pay premiums without any changes

    • Under which sections of the Income Tax Act may policyholders be eligible for tax benefits?

    <p>Section 80C and 80D</p> Signup and view all the answers

    Which characteristic is NOT associated with the Home Loan Protection Plan?

    <p>Guaranteed approval regardless of credit score</p> Signup and view all the answers

    What is the minimum age required for a financial co-applicant to be eligible for a loan?

    <p>21 years</p> Signup and view all the answers

    What is the maximum loan tenure available for home loans as specified?

    <p>30 years</p> Signup and view all the answers

    What is the minimum credit bureau score required for loan eligibility?

    <p>600</p> Signup and view all the answers

    Which of the following factors does NOT affect loan eligibility?

    <p>Insurance premium amount</p> Signup and view all the answers

    How much is Mr. Mehta's monthly EMI commitment for his home loan?

    <p>₹ 42,000</p> Signup and view all the answers

    How long will Mr. Mehta's monthly insurance premium be paid based on the information provided?

    <p>15 years</p> Signup and view all the answers

    What is the minimum loan amount available for home loans?

    <p>₹ 1 lakh</p> Signup and view all the answers

    What is the remaining loan amount Mr. Mehta has after his home loan?

    <p>₹ 45 lakhs</p> Signup and view all the answers

    What is the maximum loan amount that can be applied for under the outlined scheme?

    <p>15 lacs</p> Signup and view all the answers

    Which of the following factors is NOT required for loan eligibility as per the information provided?

    <p>Credit Score</p> Signup and view all the answers

    What is the maximum loan tenure available for borrowers under the insurance premium funding product?

    <p>30 years</p> Signup and view all the answers

    How does the Home Loan Protection Plan (HLPP) benefit the lender?

    <p>Minimizes risk of default</p> Signup and view all the answers

    What role does the Bank's Tie Up with insurance companies play in the loan process?

    <p>Allows policies to be funded as part of the loan</p> Signup and view all the answers

    A borrower has opted for a loan of 2 lacs with a tenure of 15 years. How does the HLPP assist the borrower’s family?

    <p>Settles the entire loan outstanding upon borrower’s death</p> Signup and view all the answers

    Which payment option is mentioned as a method for borrowers to pay their insurance premiums?

    <p>Both upfront and monthly installments</p> Signup and view all the answers

    What is the minimum loan amount that can be applied for in this scheme?

    <p>1 lac</p> Signup and view all the answers

    Study Notes

    Home Loan Protection Plan (HLPP)

    • Covers outstanding loan amount in case of borrower's death or terminal illness.
    • Offers a lump sum payment in case of terminal illness.
    • Provides coverage for disability, potentially covering the outstanding loan or waiving future premiums.
    • May offer tax benefits under sections 80C and 80D of the Income Tax.

    HLPP Characteristics

    • Premium: Can be paid as a lump sum or integrated into the EMI.
    • Coverage: Covers the borrower, co-borrowers, and allows for riders to cover critical illness and permanent disability.
    • Riders and Add-ons: Additional coverage can be added to the plan, such as critical illness, permanent disability, and joint borrower protection.

    HLPP Details

    • Interest Type: Fixed.
    • Minimum Income: Rs. 2,500 per month.
    • Maximum Loan Amount: Rs. 15 lakhs.
    • Minimum Loan Amount: Rs. 1 lakh.
    • Maximum Loan Tenure: 30 years.
    • Minimum Loan Tenure: 1 year.
    • Maximum FOIR and LTV: As per the CAAM policy.
    • Age of Applicant: Minimum age of 18 years (non-financial co-applicant) and 21 years (financial co-applicant). Maximum age at loan maturity is 75 years (financial co-applicant) and 90 years (non-financial co-applicant).
    • Credit Bureau Score: Minimum score of 600 required.
    • Income Proof: Depends on the Suraksha/Suvidha profile of the customer.

    Case Study: Mr. Mehta & Mr. Kumar

    • Both Mr. Mehta & Mr. Kumar are IT professionals who purchased a ₹50 lakh home loan.
    • Both have a monthly EMI commitment of ₹42,000.
    • Mr. Mehta's insurance premium is ₹40,000, payable in monthly installments for 15 years.
    • Mr. Mehta's remaining loan amount is ₹45 lakhs.

    Significance of HLPP

    • Protects the borrower's family from financial liability in case of untimely death.
    • Safeguards the lender from risk of default due to the borrower's death or disability.
    • Avoids a financial burden on the family or co-borrower.

    Insurance Premium Funding (IPF)

    • Offered by Bandhan Bank.
    • Borrowers can opt for term or group HLPP products.
    • Borrowers can use this scheme to fund the insurance premium with any insurance company that the bank has a tie-up with.

    Eligibility Parameters for IPF

    • All home loan customers can apply.
    • Income Proof: As per Suvidha/Suraksha profile of the customer.
    • Minimum Loan Amount: Rs. 1 lakh.
    • Maximum Loan Amount: Rs. 15 lakhs.
    • **Maximum Loan Tenure: **30 years.
    • FOIR: As per the permissible limit in the CAAM policy.
    • Value: Proportionate value as per system calculation.

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    Related Documents

    Insurance Premium Funding PDF

    Description

    Explore the essential features and characteristics of the Home Loan Protection Plan (HLPP), which safeguards borrowers in case of unfortunate events like death or terminal illness. This quiz covers premium options, coverage details, and additional riders available under the plan, highlighting the importance of financial security for homeowners.

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