What is mortgage redemption?

The LIC's Mortgage Redemption Assurance policy program is one of the industry's leading programs. I suggest you consider this facility for safe future planning as it helps pay all of your existing debt and bills in full after your death. Read on to know what is mortgage redemption insurance.

What is mortgage redemption insurance meaning?

LIC Mortgage Redemption Plan is a personal plan that offers complete protection against all debts and liabilities. The payable sum is paid to settle any remaining outstanding debts, leaving the family free from financial obligations, given the person covered passes away within the duration of the policy. But, nothing is due to the policy's maturation if the person covered lives through the whole policy term.

This coverage is appropriate for middle-aged to senior professionals whose families could require help paying off loans in the event of their untimely passing. Up to Rs 10,00,000 in mortgage redemption insurance is guaranteed. The payment can be paid annually, half-yearly, quarterly, monthly, or through a salary savings account.

What are the LIC mortgage redemption insurance policy core elements?

• This program covers a death benefit and no maturity reward, it is a basic security future plan.

• The death allowance is given as a single payment from the Insurance Cover.

• As the loan burden gets smaller over time, the amount insured also gets smaller.

• Premiums are due for intervals that are equivalent to 2/3 of the loan's payback period.

• The individual might be responsible for paying for the medical check.

What are the benefits of the LIC redemption policy?

• If you pay a premium for coverage, you may be eligible for tax deductions under Section 80C of the Income Tax Act. 

• Section 10(10)D of the Income Tax Act treats maturity earnings as tax-free income.

• The coverage will expire and no rewards will be provided to you if you stop paying your premiums after the first year's amount paid.

• If you purchase the LIC Mortgage Redemption Policy, then you are not eligible for a new loan.

This is all you need to know about mortgage redemption insurance.