The IndiaFirst Group Credit Life Plan from IndiaFirst Life Insurance is a non-participating, non-linked group protection plan that offers coverage to policyholders with outstanding loans, protecting their dependents in the event of the policyholder’s death by paying off the outstanding loan amount. The plan secures members against home, education, personal as well as automobile loans, thus providing comprehensive coverage from liabilities. The plan has a tenure ranging from 5 years to 30 years, based on the master policyholder’s requirements. The long tenure enables the members to benefit from liability coverage for a significant part of the loan tenure.
The IndiaFirst Group Credit Life Plan is targeted at employers looking at providing lenders protection in the event of the unfortunate demise of lenders. The plan conversely protects lenders (of a common borrower) against loan liabilities, with their dependents protected in the event of their death. The plan has certain eligibility criteria which have to be met, which are mentioned below:
|Minimum entry age||18 years|
|Maximum entry age||69 years|
|Maximum maturity age||75 years|
|Minimum group size||50 members|
|Maximum group size||No limit|
|Minimum policy term||Limited premium- 5 years Regular premium- 5 years Single premium- 2 years|
|Maximum policy term||30 years|
The sum assured is the amount that the policyholder/member stands to receive, excluding any taxes or benefits. The sum assures under the IndiaFirst Group Credit Life Plan is a minimum of Rs.5,000 and a maximum of Rs.50 crore. Under the plan, this cover is provided against the member’s loan. Under the plan, members can choose between two sum assured options, a level term cover and a decreasing term cover.
The premium is the amount payable by the policyholder/member for the coverage provided. Members can pay their premiums either annually, half-yearly or monthly, based on their convenience. The minimum premium amount would depend on the loan amount and other variables such as the age of the member, policy tenure, premium paying mode, sum assured option chosen etc.
The policy provides for two types of cover, based on which the sum assured and premium payment is decided, as mentioned in the table below:
|Level term cover||Decreasing cover|
|Premium||Choice of regular/limited/single premium.||Choice of limited or single premium.|
|Plan term||Plan term would be equal to the loan term at the time of plan inception.||Plan term would be equal to the loan term at the time of plan inception.|
|Sum assured||Sum assured would be:
||Sum assured would be the initial loan amount, which would decrease over the loan tenure as per the loan repayment schedule. The member would be provided with a certificate of insurance at the time of policy inception.|
The IndiaFirst Group Credit Life Plan works in the following way:
The coverage offered under the plan is the death benefit. The death benefit applicable to both the master policyholder and the member is outlined in the table below, based on the type of coverage applied for:
|Level term cover||Decreasing term cover|
|Nominee/legal heir||The nominee will receive the sum assured as mentioned at the policy’s inception through the master policyholder.||The outstanding loan amount would be provided to the nominee through the master policyholder.|
|Master policyholder||The nominee/legal heir would be required to pay the outstanding loan amount to the master policyholder. Any balance amount would be retained by the nominee.||The outstanding loan amount would have to be paid to the master policyholder.|
The policy provides for a pay-out in the event of the death of the member. However, there are certain exclusions in which case the company will not pay any benefit. The exclusion under this plan is as follows:
Suicide: In the event of the member committing suicide within 12 months of the date of the policy’s inception or renewal, the nominee will not receive any death benefit. Instead, he/she will receive 80% of the premiums paid.
The features and benefits provided by the IndiaFirst Group Credit Life Plan are as follows:
|Free look period||If the policyholder is not satisfied with any of the conditions or provisions of the policy, he/she may return the policy during the free look period and not incur any penalties. The free look period is 15 days from the date of receipt of the physical policy document. For distance marketing policies, it is 30 days from the date of receipt of the policy.|
|Grace period||Policyholders who default on a premium instalment are provided with a 30 day grace period within which the premium amount can be paid with no penalties.|
|Moratorium benefit||If the loan disbursement and the date of loan repayment are different, the member can avail of a moratorium benefit, as follows:
|Surrender of plan||The plan can be surrendered by the master policyholder and the member at any time during the policy term. If a member chooses to foreclose on the loan before the policy term, the master policyholder surrenders the policy but the member can choose to continue with the life cover till the end of the policy term.|
|Surrender value||In the event of surrender of the policy before the loan is paid off, the surrender value is calculated. There is no surrender value for regular premium plans.|
|Policy revival||The policy can be revived within a period of 1 year from the date of the last premium being paid. The policy can be revived by either the member or the master policyholder. For the policy to be revived, the following terms have to be met:
|Policy termination||The policy can be terminated under the following circumstances:
The IndiaFirst Group Credit Life Plan offers policyholders tax benefits through investing in the policy, providing them life cover as well as tax exemptions. The tax benefits offered to policyholders are as listed below:
It is to be noted that tax exemptions are subject to change. It is advisable to consult with a tax advisor for information on current exemptions.
The IndiaFirst Group Credit Life Plan ensures the financial stability of the member’s dependents by taking the loan liability off their shoulders. In addition to this and other features offered under the plan, IndiaFirst customers can enjoy a host of other benefits such as the ones mentioned below:
IndiaFirst Life Insurance is a joint venture between Andhra Bank, Bank of Baroda and the Legal & General Group. The private life insurance company has a large presence across the country, serving clients through over 8,000 branches. The company provides a range of life insurance products to their customers, from savings plans to health and retirement options. The company also has a high claim settlement ratio and is known for its customer service. In addition, the company emphasises on putting their customers’ satisfaction and convenience above all else, which is seen through various measures.