This is a very subjective question, but an important one.

When you are applying for a home loan, a lot of banks and non-banking finance companies (NBFCs) do push you towards purchasing a home loan protection plan (HLPP). Sometimes, they even go to the extent of saying you will not get a home loan if you don’t take the necessary loan protection plan. But that is utter rubbish. No bank or NBFC can force you to buy a loan protection plan.

It is, however, recommended that you buy the HLPP. The reason for this is simple. Very few single individuals buy houses for themselves. By single, I don’t mean marital or relationship status. It means that most people who purchase a home have dependents behind them. These dependents could be husband/wife/children/aged parents, etc.

Now, in the unfortunate case of your (the borrower’s demise), the liability for paying the equated monthly instalments (EMIs) falls up on your dependants. This situation is far from prefect as they are already dealing with your loss, both emotionally and financially.

By taking a home loan protection plan, however, you can ensure that this big burden of repaying the EMIs doesn’t fall on your dependents and gets covered by your insurance cover.

Thus, while not mandatory, any individual who has dependents must consider purchasing a home loan protection plan (HLPP).