How Mortgage Plans Work
The Mortgage Life Insurance Plans provide a cover for the outstanding loan amount of the borrower. The borrower pays a nominal premium for the insurance to the lender. The lending institution pays this premium to the insurer on behalf of the borrower. In the event of the demise of the borrower, the insurer pays out the sum assured to the lender or the financial institution.
This sum assured is determined on the basis of the outstanding loan amount at the time of purchasing the policy and can be uniform throughout the loan tenure or can be a reducing sum, based on the loan repayment schedule.
Eligibility Conditions and Scheme Coverage
The scheme is applicable to a borrower with an outstanding loan with a financial institution. It offers cover if the borrower is between 18 years of age to 60 years of age. The plan however has a maturity age of 65 years.
The policy term for each borrower would be linked to his loan duration. The coverage on a borrower would be terminated in case the borrower prepays the entire outstanding loan amount.
The premium paid by a borrower, in his capacity as an individual, would be eligible for tax rebate under Section 80 C of the Income Tax Act, 1961.
Commencement and Termination
• The insurance coverage shall commence at the latest of
Date of commencement of the Policy
Acceptance of the Member by the Insurer, communicated vide acknowledgment to the Bank.
• The insurance coverage shall will cease at the earliest of
Member attaining cover ceasing age or on death,
Termination/discontinuation of credit card with Bank, for any reason
Termination of group master policy,
Policy renewal date.