InvestorQ : What is a home loan protection plan (HLPP)?
Tanya Mehta made post

What is a home loan protection plan (HLPP)?

Nitin Shah answered.
3 years ago

Home loan protection plan (HLPP) is an insurance policy that gives cover to a home loan borrower, in case he/she dies. The home loan protection plan is also called mortgage life insurance policy.

Although in no way mandatory, this plan is advised for any individual who is taking a home loan. By taking this HLPP, a borrower ensures that his/her family doesn’t face any financial burden (owing to the home loan) in case of his/her demise.

The home loan protection plan (HLPP) lapses in two cases:

- Once the home loan is completely repaid

- If the borrower dies

Certain policies may even continue till the end of its policy term even if the loan is completely repaid. Such a policy is usually provided by life insurance companies.

In contrast, general insurance companies provide this cover along with home insurance (protection of your property against fire, earthquake and other perils). The premium for such dual benefit policy is naturally higher than the normal HLPPs.