In spite of banks and housing finance companies offering mortgage redemption policies for low premium, very few borrowers are opting for these policies with the result that in case of the death of the mortgagor, it becomes virtually impossible for the family to repay the loan, particularly when the outstanding loan and interest are quite high. Lack of knowledge is making people take the wrong step. This article looks into why one should buy mortgage redemption or reduce term insurance policy.

Housing loan or home loan is a big market. There is a boom in housing finance. The market maybe as big as Rs. One lakh crore. Housing loans are available on liberal terms from banks, housing finance companies, cooperative societies, employers and various other financial institutions.

Most of these loans are being availed by people in the age group of 26 to 35. They are young with monthly incomes of Rs. 15,000 and above and want to save on income tax and also on house rent. Many of these young people belong to the double income group category where both the husband and the wife are earning.