This is a non-linked, non-participating group insurance plan that is specially designed for lenders like a bank, lending institution, or any other financial institution. All lending institutions help their customers financially and help them educate their child, build a new house, or set-up a new business. Without the capital given by these lending institutions, many of us would have suffered financially. Apart from lending the money required, lending institutions these days are taking an extra step and help their borrowers insure the liability. By insuring the liability of their borrowers, they help eradicate the financial burden that a family will have to bear in case of the sudden demise of the insured person. Please note that this plan is available for lenders that are regulated by the National Housing Bank, Non-Banking Financial Companies, and The Reserve Bank of India.
IDBI Federal Insurance Co Ltd. offers a single premium group insurance plan called the IDBI Federal Loansurance Group Insurance Plan SP that makes sure that the borrower's loan is insured. This plan comes with a minimum cover period of 2 years and can be attached to any type of loans.
When a financial institution buys an IDBI Federal Loansurance Group Insurance Plan SP, a master policy is given. All the members of the financial institution are covered under the master policy. Each member under the plan will receive a separate insurance certificate.
Master policyholders can choose from 2 kinds of life cover under this plan, namely level cover and reducing cover. Under the level cover, the death benefit payable is constant throughout the term of the policy and is always equivalent to the sum assured that the insured chose during the inception of the plan. Whereas, under the reducing cover, the death benefit payable reduces over a period of time.
A financial institution has to meet the following eligibility criteria to buy an IDBI Federal Loansurance Group Insurance Plan SP:
|Plan Type||Non-linked, non-participating, group insurance plan|
|Minimum Entry Age||15 years for education loans and 18 years for all other loans|
|Maximum Entry Age||65 years|
|Maturity Age||75 years|
|Policy Term||Minimum policy term is 2 years and the maximum policy term can go up to 30 years, including the period of moratorium.|
|Group Size||The minimum group size is 50 members and there is no maximum limit.|
Under the IDBI Federal Loansurance Group Insurance Plan SP, each member would have sum assured benefit. The master policyholder will be allowed to choose the sum assured amount. The sum assured will also be decided by the policy term and the premiums paid. For more details on the sum assured and premiums, read on.
|Sum Assured||The minimum sum assured under this plan is Rs.10,000 and the maximum sum assured limit is Rs.1,00,00,00,000.|
|Premium Payment Frequency||Single premium|
|Policy Term and Premium Paying Term(PPT)||Minimum policy term is 2 years and the maximum policy term can go up to 30 years, including the period of moratorium. This is a single premium payment plan.|
IDBI Federal Loansurance Group Insurance Plan SP helps many people protect their loved ones in case of any eventuality. It makes sure that the debt is not passed on to the family members but is rather insured.
Other benefits and features of the IDBI Federal Loansurance Group Insurance Plan SP are as follows:
|Death Benefit||In the event of the death of the insured person, the death benefit will be payable under the IDBI Federal Loansurance Group Insurance Plan SP. Please note that the death benefit is payable only when the policy is active and all premiums are paid. In case of death of the policyholder, the insurance company will get in touch with the master policyholder to request for a credit account statement. According to this statement, if there is any loan balance, the insurance company will pay the outstanding loan amount to the mast policyholder and the remaining of the death benefit will be paid to the beneficiary. IDBI Federal Loansurance Group Insurance Plan SP can be a single cover, joint cover, or proportionate cover policy.|
|Maturity Benefit||Unfortunately, there is no maturity benefit under the IDBI Federal Loansurance Group Insurance Plan SP.|
|Surrender Value||The master policyholder has the option to surrender the policy at any time. When the master policyholder surrenders the policy, the member has an option to agree to surrender or to continue the policy. If both the master policyholder and the member agrees to surrender the policy, the surrender value becomes payable and the policy will expire immediately. Surrender value for level cover is calculated as 75%*single premium*(unexpired term/term of the cover). Surrender value for reducing cover is calculated as 5%*single premium*(unexpired term/term of the cover)*(Reduced SA/Starting SA). For policies that accrue interest in the moratorium period, the surrender value during the moratorium period is equal to the sum assured amount. The surrender value after the moratorium period is equal to the initial sum assured plus interest accrued.|
Following are some of the other key features of the IDBI Federal Loansurance Group Insurance Plan SP:
|Pre-closure or transfer of the plan||If a member has paid the entire sum total amount of the plan before the end of the policy term or if the member has transferred has transferred the policy to another financial institution, he/she has two options. The first option is to wait for the policy to mature and take the sum assured and the second option is to surrender the policy and receive the surrender benefit.|
|Free Look Period||The IDBI Federal Loansurance Group Insurance Plan SP has a free look period of 15 days within which the master policyholder can return the policy after reviewing the terms and conditions. The member of the policy can also return the plan within 15 days if they do not agree to any of the terms and conditions of the plan.|
|Nomination||Nomination facility is available as per Section 39 of the Insurance Act, 1938.|
|Assignment||Assignment facility is available as per Section 38 of the Insurance Act, 1938.|
Additional riders can be attached by the policyholder if they are looking for extra protection. Currently, IDBI Federal Life Insurance Co Ltd. does not offer any add-ons with IDBI Federal Loansurance Group Insurance Plan SP. However, the insurer, may in future, allow their customers to attach a rider under this policy. Contact your insurer or agent from time to time to check if this option is available.
Please read the suicide exclusion under the IDBI Federal Loansurance Group Insurance Plan SP.
Suicide Exclusion: If the insured person commits suicide, whether sane or insane, resulting in death, within one year from the date of issue of the policy, the insurance company will pay 80% of the premiums paid by the policyholder to the nominee or the beneficiary, provided the policy is active.
Policyholders who have purchased the IDBI Federal Loansurance Group Insurance Plan SP will enjoy tax benefits under Section 80C of the Income Tax Act, 1961 and under Section 10(10D) of the Income Tax Act, 1961.
IDBI Federal Life Insurance Co Ltd. is a joint venture of Ageas, Federal Bank, and IDBI Bank. It is one of the leading insurance companies in India. Their portfolio includes retirement plans, endowment plans, wealth management, and group insurance plans. The company’s hard work and determination made it achieve break even within 5 years from the time they set up their business. Whether you are looking for a plan that promises guaranteed income to maximise wealth or you want an affordable group insurance plan for your new business, IDBI Federal Life Insurance Co Ltd. will be able to help you out.