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IDBI Federal Loansurance Group Insurance Plan

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. 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.

IDBI Federal Insurance Co Ltd. offers a single premium group insurance plan called the IDBI Federal Loansurance Group Insurance Plan 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, 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.

Eligibility – Who is the IDBI Federal Loansurance Group Insurance Plan for?

A financial institution has to meet the following eligibility criteria to buy an IDBI Federal Loansurance Group Insurance Plan:

Minimum Entry Age 18 years
Maximum Entry Age 55 years
Minimum Maturity Age 23 years
Maximum Maturity Age 60 years

Sum Assured and Premium Range – What you get and what it costs?

Under the IDBI Federal Loansurance Group Insurance Plan, 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.

Policy Term 5 to 10 years
Premium Payment Term (PPT) Single Premium or Regular Premium
Premium Payment Mode Annual mode for Regular Premium
Premium Minimum Rs.400 for Single Premium and Rs.100 for Regular Premium Maximum Rs.5,200
Sum Assured 20 times the Single Premium

Plan Coverage – What the IDBI Federal Loansurance Group Insurance Plan Covers?

Other benefits and features of the IDBI Federal Loansurance Group Insurance Plan 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. 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 can be a single cover, joint cover, or proportionate cover policy.
  • 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.

Other Key Features - Freelook Period, Surrender Values, Grace Period etc.

Following are some of the other key features of the IDBI Federal Loansurance Group Insurance Plan:

  • 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
    • The second option is to surrender the policy and receive the surrender benefit.
  • Free Look Period: The IDBI Federal Loansurance Group Insurance Plan 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.
  • Termination: Your policy will be terminated under the following circumstances:
    • Policy lapse at the end of policy revival period.
    • Surrender value paid to the policyholder by the company.
    • Sum Assured paid to the nominee in the case of demise of the life insured.
    • Upon reaching policy maturity date.
    • In the case of fraud or misrepresentation by the policyholder, the policy will be terminated by the company after paying the surrender value.
  • Grace period: In the case of regular premium payment option, you are given a grace period of 30 days (for annual payment mode) from the date of first unpaid premium to pay the premiums due. The life cover and all benefits under this plan will be active during the grace period.
  • Revival: The policy can be revived within 2 years from the date of the first unpaid premium. You must provide proof of insurability and submit a written request for reinstatement. You must pay all premiums due with 5% interest p.a. till the reinstatement date. In the case of Single Premium option, lapsed policies cannot be revived.
  • Nomination: You can nominate a person to whom the company will pay death benefit in the case of the demise of the life insured. If the nominee is a minor, an adult should be appointed to hold the benefit until the nominee reaches 18 years of age.

Exclusions – What is excluded from the IDBI Federal Loansurance Group Insurance Plan?

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.

Tax Benefits - How you can save with the IDBI Federal Loansurance Group Insurance Plan?

Under IDBI Federal Loansurance Group Insurance Plan, you can get tax deductions on the following:

  • On premiums paid under Section 80C of the Income Tax Act, 1961.
  • On maturity proceeds under Section 10(10D) of the Income Tax Act, 1961.

Other Benefits – How you can save with the IDBI Federal Loansurance Group Insurance Plan?

There are several other benefits of purchasing insurance plans from IDBI Federal Life Insurance Company Limited such as:

  • Customer service: For any insurance related queries, call toll-free number at 1800 209 0502 or mail to support@idbifederal.com.
  • Track your application: You can check your application status by entering the application number on the company website.
  • Premium calculator: You can calculate premiums easily and accurately using the online premium calculator available on the company website.
  • Grievance redressal: The Company will acknowledge the register complaint or grievance within 3 working days and resolve it in 2 weeks from the date of receipt. You can register a complaint online through the company website by filling up an online form.
  • Premium payment: You can make premium payments online, at an IDBI Bank branch, Federal branch, or IDBI Federal branch, auto-debit, and cash deposits up to Rs.49,999.
  • Claim process: You can initiate your claim by visiting the nearest IDBI Federal branch or writing to The Claims Department, IDBI Federal Life Insurance, Ground Floor, Tradeview, Oasis Complex, Kamala City, P.B. Marg, Lower Parel (W), Mumbai - 400 013. Call 1800 209 0502 or send an email to claims@idbifederal.com for assistance with your claim process or checking the status of the claim. Claim amount will be paid via NEFT.

Why should you buy IDBI Federal Loansurance Group Insurance Plan from IDBI Federal Life Insurance Company Limited?

The following are the reasons why you should buy IDBI Federal Loansurance Group Insurance Plan from IDBI Federal Life Insurance Company Limited:

  • IDBI Federal Life Insurance Company Limited offers a wide range of insurance products from protection solutions and wealth management to retirement solutions and ULIPs, to both individual and corporate customers.
  • The company has 2,964 branches across the country to reach urban and rural customers.
  • As of March 2017, It has issued around 10.29 lakh policies with a Sum Assured of Rs.58,653.76 crores.
  • The total Assets Under Management of IDBI Federal Life Insurance is Rs.6,090 crores and capital base in more than Rs.800 crores.