What is a mortgage redemption plan?
Asit Tewari, Lucknow
A Mortgage Redemption Plan is a pure protection term insurance policy catering to insure loans. In this plan, if the life insured dies within the policy tenure, the lump sum assured is used to pay off all the outstanding loans and debts so that the family is not liable to pay any. However, if the life insured survives till the end of the policy tenure, then nothing is payable on the policy maturity. Basically, the beneficiary of the policy is the lender and such a policy is mostly insisted upon when one takes a high value home loan.
