Imagine this: You take a loan and life takes an unexpected turn — job loss, accident, or worse.
Who pays the EMIs then?
That’s where Loan Insurance steps in.
In 2025, more Indian borrowers are opting for Loan Protection Plans to secure their future. But is it worth the extra cost? Let’s break it down.
What Is Loan Insurance?
Loan Insurance (aka Loan Protection Insurance) is a policy that covers your outstanding loan repayments in case of:
Death
Permanent disability
Critical illness
Job loss (limited plans)
The insurer pays part or full of your remaining EMIs if the insured event occurs.
Types of Loan Insurance in India
| Type | Covers | Linked To |
|---|---|---|
| Credit Life Insurance | Death of borrower | Personal/Home Loans |
| EMI Protection Insurance | Job loss, illness, accident | Short-term Loans |
| Comprehensive Loan Cover | Death + disability + illness | High-ticket Loans |
🔐 Vizzve Finance partners with top insurers to offer loan cover add-ons at the time of application.
Should You Get Loan Insurance?
✅ Get It If:
You’re the sole earning member
You have a large loan (home, education, business)
You have dependents who may struggle with EMI
❌ You May Skip If:
You already have a life insurance policy covering loan value
The loan is small and short-term
You have joint borrowers with backup income
How Much Does Loan Insurance Cost?
Usually:
Single Premium: 1–2% of loan amount
Can be added to your EMI or paid upfront
₹500–₹1,500 annually per ₹1 lakh loan (approximate range)
💡 Pro tip: Vizzve helps you compare options and calculate the actual impact on EMIs.
Things to Watch Out For
🔍 Read the policy exclusions (many don’t cover suicide, temporary job loss, or pre-existing illness)
📄 Ensure the claim process is simple
👥 Choose group insurance (via Vizzve) for lower premiums
Vizzve Smart Tips
✔️ Ask your lender if insurance is optional
✔️ Compare premium + benefits before adding to EMI
✔️ Ensure nominee details are correctly filled
✔️ Review your existing insurance before buying new coverage
❓FAQs
Q1: Is loan insurance mandatory in India?
No. RBI has clearly stated that loan insurance is not compulsory. It’s your choice.
Q2: Will insurance cover co-borrowers?
Only if the policy includes them. Check for joint cover options.
Q3: Who offers loan insurance?
Major life and general insurers like LIC, ICICI Lombard, HDFC Ergo, and through platforms like Vizzve Finance.
Published on : 22nd July
Published by : SMITA
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RBI-Registered Loan Partner | 10 Lakh+ Customers | ₹600 Cr+ Disbursed