Objective

The plan aims to protect family members from the burden of paying any outstanding loan on demise of the bread earner.

What does it do?

This term insurance plan covers outstanding loans of the policyholder including housing loan, personal loan, outstanding loan on credit cards etc. It is a decreasing term plan where sum assured reduces as the loan is repaid. In case of unfortunate demise of the insured person, the sum assured equal to outstanding loan is paid to the nominee. The policy doesn't offer any survival benefit.

Pros

Women can avail discount on premium and pay premium equal to 3 years younger male policyholder.
It has a longer policy revival time of 3 years from date of lapse of policy.
Single premium policies are available for a maximum term of 15 years only.
Premiums qualify for taxation benefits.

Cons

It doesnot consider increase in interest rates under floating rate loans.

Suited for

This policy is useful if you have an outstanding loan.

Our View

Loan protection cover is a good way to protect your family from the burden of liabilities in case something happens to you.
When buying such a policy, make sure to match the interest of your loan with the rate at which sum insured reduces under the policy. This ensures that you have the right cover and not one that is higher or lower than your needs.

Eligibility

Entry Age (years)

Minimum

21

Maximum

55 for Regular premium policies and 60 for Single Premium policies

Maximum Maturity Age (years)

64

Policy Term (years)

Minimum

10 fr Regular Premium policies and 3 for Single Premium policies

Maximum

30 for Regular Premium policies and 15 for Single Premium policies

Sum Assured (Rs)

Minimum

250000

Maximum

No limit

Minimum Premium (Rs)

Yearly

1000

Single

3000

Premium Payment Frequency

Single, Yearly, Half-yearly, Quarterly and Monthly (via ECS)

Premium Payment Term

Single, Limited, equal to policy term

Policy Cover

Policy Cover keeps decreasing as the loan is repaid

Other Features

Free Look Cancellation

In case, you are not satisfied, you may choose to cancel the policy within 15 days of receiving the policy documents. Upon such cancellation, you will be paid back the premiums, minus the cost of stamp duty, medical reports and proportionate premium for the period for which the risk was covered.

Grace Period

You are allowed to pay premiums within 30 days of premium due date for Yearly/ Half-yearly/Quarterly premium payment and 15 days from premium due date in case of Monthly premium payment. If a due premium is not received within the grace period, your policy will lapse and the life insurance cover will be terminated.

Lapsed Policy Reinstatement

You may reinstate your lapsed policy within 3 years from date of first unpaid premium by paying due premiums and undergoing underwriting requirements, if any.

Tax Benefits

Section 80C, 10(10D) of the Income Tax Act, 1961 would apply.

Exclusions

In case of death by suicide during the first policy year, or within one year from the date of reinstatement, no death benefit is payable. Further, if the Life Assured under the policy, whether medically sane or insane, commits suicide, within one year of exercising the option to increase the Sum Assured, then the amount of increased Sum Assured will not be considered in the calculation of the Death Benefit

Customer Service

Address

Reliance Life Insurance Company Limited Registered office: H Block, 1st floor, Dhirubhai Ambani Knowledge City, Navi Mumbai, Maharashtra 400710, India