LOAN INSURANCE

  • Loan insurance is compulsory for all types of loans.

  • The insurance cover to the loan is provided upto the last EMI (instalment) in case of HBL.

  • If the loan is disbursed in one lumpsum, then one time non-refundable contribution towards loan insurance will be recovered from loan amount.

  • In case the loan is disbursed in instalments then contribution will be recovered from the amount of instalments.

  • In case an individual opts to repay the loan in higher number of instalments, additional amount of contribution toward loan insurance will be recovered for enhanced period of repayment of loan.

  • In the event of death of loanee, the principal outstanding as on the first day of the month in which death occurs will be adjusted and no loan amount will be recovered from the death benefits payable to the nominee from AFGIS.

  • The year wise break down of one time non-refundable contribution for 1,00,000/- of loan is as follows :

Term (Years) Amount of Contribution
(Per Lakh) (wef 01 Jan 18)
1 202
2 389
3 548
4 683
5 809
6 926
7 1035
8 1137
9 1239
10 1345
11 *1442
12 1533
13 1618
14 1697
15 1778
16 1860
17 1944
18 2031
19 2119
20 2210
21 2302
22 2397
23 2494
24 2593
25 2694

Note

1.  One time non-refundable contribution will be calculated for amount in multiples of Lakh and the tenure (no of years) of the loan.

2.   Fraction of a year will be counted as one full year.

Example calculation

Loan sanctioned amount : 5.93 Lakh

Tenure of Repayment : 125 EMIs (10 years 5 months)

Calculation of contribution

Amount for calculation of contribution : 6 Lakh

Tenure for calculation of contribution : 11 years

Amount of contribution

Total loan insurance contribution : 6 X 1442 = 8652/-