Cancel home loan insurance policy

POSTED BY RD ON December 28, 2012 3:58 pm COMMENTS (54)

I had taken home loan from DHFL one month back. At the time of taking loan branch manager told me that it mandatory to have home loan insurance with Home loan. He then given me ICICI pru Home assure policy which cost me around 37k.

Two days back i recived the policy document form Icici prudential. I was lucky enough that Manish also posted the article on Home loan insurance at the around same time.

My query is that can i cancel the policy now (still in look up period). Can DHFL have any objection on this. When i will cancel policy will icici pru will also inform to DHFL.

Adding : I already got full Home loan amount from DHFL. Can they do anything now?

54 replies on this article “Cancel home loan insurance policy”

  1. Sreenivasarao says:

    I had taken housing loan of 40,00,000 for that Paid insurance amount of 269672/- Now I closed the housing loan with in a year, and applied insurance amount what i have paid. The agents are told that only 20% amount will be paid by the DHFL pramerica insurance company. Is it correct or not can any body help for getting me full amount?

  2. blsharma says:

    I have taken home loan fro m hdfc and they gave me one policy for home suraksha and one life insilurance for me and charging Rs56000 as another loan for which I m paying emi rs 1065 . how I can stop thid

      1. bls says:

        Dear sir,My policy is one and half year old now what to do now to stop

        1. You need to go to branch for this.

          1. Irfan says:

            I have taken 60 Lakhs Home load from IDBI I am repaying and closing full load in 2 months now I came to know 65000 Policy How to discontinue that . Pls comment

            1. Hi Irfan

              I am not clear on what is your question. Please repeat it with more clarity

              Manish

  3. RUPESH S KUMBHAKARN says:

    I have ICICI home and they offered me ICICI prudential insurance to protect home loan. Now i have 3 year payoff premium which was already paid meaning i paid 3 year policy premium which will cover the entire loan tenure of 15 years . My Q is how do i stop premium payments since they are still charging me around 2000 INR although the policy is paid off . when i cann icici bank they are telling me to call icici prudential and when you call prudential they are saying to call bank. experts please suggest what should i do as i already paid them 16,000 INR more on premiums.

    1. You need to check with them how to stop it, ONly they will be able to share the process .

  4. siny says:

    Hello Sir,

    what is the meaning of legal and technical verification is cleared by DHFL

    1. Ranjan says:

      Legal and technical verification is done by banks to assure that the property is on the name of the owner itself and there are no legal troubles witht he property and it is safe for them to give loan on that property.

  5. Sheetal says:

    Hello Sir, 3 years back my brother have taken DHFL Home loan at the time of taking loan branch manager told me that it is mandatory to have home loan insurance with Home loan and given us ICICI Prudnetial Home Assure Policy, On 27th June 2016 my brother had brain Hemorrhage and he is paralyzed now he is permanent disable, he is a single earner and there is no any other income source to survive his family in this situation it is impossible to pay EMI of housing loan, please advise in this situation how will ICICI Prudnetial Home Assure Policy will be helpful.

    1. Read the policy once. If there is any provision of paying the EMI incase of permanent disablement

  6. Naveen says:

    Dear Sir,
    Greetings, am a Agricultural Scientist in a govt R & D Institute.
    Recently I have purchased a open plot with own (50%) funds and bank loan (plot-cum-construction) in Hyderabad.
    The real estate company has done all the work for sanction of loan & the bank PNBHF has sent an executive to our place for all the signatures. We were not at all informed about the insurance.
    We were shocked to see Rs. 62000 as premium for Home Guard Plus policy (52945) and building insurance (9056) added to my loan amount (15.85 lakhs making it 16.47 lakhs).
    Today we have received the policy documents.
    We would like to cancel this under 15 days free look period as we were not interested & also not informed. Further, we would like to prepay the loan at the earliest, in 2-3 years.

    Kindly help/guide me in returning the policy in this 15 days period.
    If required, I can send you images of the policy documents

    Thanks a lot & sorry, if am bothering you.

    1. What help you need here. All you need to do is go to their branch and apply for giving back the policy. Thats all !

  7. pankaj says:

    Hi sir I will cancel Policy of DHFL in free lookup period . Now mail from DHFL premica Insurance Co.Ltd. that refund amt credited to Master Policy holder account (DHFL). What is meaning of this.

    1. I am not sure on that !

  8. Poonam says:

    Hi Manish .we had applied for home loan n 21 lacs were approved. We had taken only 5 lacs.but they are charging insurance on full amount. Pl suggest wat to do.as we planning not to avail further amount

    1. Hi Poonam

      This is very specific query which you should follow up with the concerned authority only. We wont be able to comment on that

      Manish

  9. Gireesh says:

    Hi Sir,
    Was sanctioned loan form DHFL for 47 Lacs, DHFL employee took all the documents with and even i signed all with out reading, he told insurance to be take along with home loan and it was around 2 Lacks added to my 47 Lacs, now total come up with 49.5Lacks, when i asked customer care people they said its optional. the policies they sanctioned are, DHFL home shield (dhfl – pramerica), Standard fire and Speical Perils policy (chola ms), Group health Insurance policy till 2019 (chola ms) and group personal Accident insurance policy till 2021(chola ms), what should i take call on these. Please suggest me. I am horrible position, and one EMI is already debited.

    1. You should have checked that a bit before. Now the policies are already in force I guess. Cant do much !

      1. Gireesh says:

        Yes i would have, thanks for reply. In the policy document they had written there is a free look period of 15 days to accept/reject, when i approached bank saying this reason and ask for cancel, manager is not ready to take.
        Then i posted the documents to head office by attaching a self written letter to cancel the policy and mentioned manger is not ready to accept the cancellation. Have to wait and see what is gonna happened.

        1. If you have sufficient proofs, then dont worry . it will be taken back. complain to banking ombudsman on this

    2. venkat says:

      Hai girish,

      What happened to your policy? Have they taken bank the policy and credited back the premium amount to your Home Loan account. I am facing a similar situation. Pl reply immediately.

      1. gireesh says:

        Venkat,
        Yes, it was cancelled. i was contacted with Head branch and told free look period etc, they cancelled the policy.

  10. PANKAJ says:

    SIR I AM NOT RECEIVED YET DHFL INSURANCE POLICY SINCE I TAKE LOAN PAST 3 MONTHS. I WANT CANCEL THIS POLICY. SHOULD I CANCEL IT NOW.

  11. Ajay says:

    Hi, I have taken home loan from IDBI with Home Loan insurance with 686 P/M. If I pay for 160 Month it go more than 1 lakh. Can I close it and take term policy. Logically they should accept the request of cancel home loan insurance policy. Please help me to take right way.

    1. Hi Ajay

      I can see that you are thinking of buying a term plan. ALl you need to do is leave your details at https://www.jagoinvestor.com/solutions/buy-life-insurance-plan

      Our team will get in touch with you

      Manish

  12. Pankaj shukla says:

    sir
    i take hone loan from DHFL they section loan amt 17.37 lacs and at disbursement time they deducted insurance amt rs.1.47 and give me only Rs.15.90. there short fall Rs.1.10 lac to buy house. can i cancel policy of Chola Mandal and take the policy from open market.

    1. Yes you can do that, but better do it fast !

      1. Jitender says:

        Need yr help in cancellation of policy provided by DHFL along with home, please contact me or share yr contact details.
        Jitender
        9871909388

        1. Hi Jitender

          This is very specific query which you should follow up with the concerned authority only. We wont be able to comment on that

          Manish

  13. NILESH says:

    HI MY NAME IS NILESH I M TASKING 31 LACS HOME LOAN & DHFL WANTS ME TO TAKE HOME INSURANCE PLAN OF 2.20 LACS FOR 25 YEARS WHICH I DENIED , CAN I TAKEN THE SAME FROM OPEN MARKET & ALSO FOR YEARLY BASIS AS IT WILL SAVE MY CASH FLOW NOW & INTERET & EMI EFFECT ALSO.

    PLS. CALRIFY

    1. Yes, better not take it from them

  14. anand says:

    Is it compulsory to do home insurance for getting home loan

      1. Anand says:

        Thanks for your timely guidance. I am in process of getting a home loan of 15 Lakh and they are offering me a ULIP plan for 12 yrs premium of Rs. 18000. Pl also suggest me if opting for condition 4 is their any possibilities of getting home loan cancelled if already approved and submission of 1st installment.

        Anand

        1. If home loan is approved already , then they cant cancel it . Just dont buy the ULIP

  15. Dear Aman, I’m out of India as of now, so in case you want to discuss over phone, VIBER or G-talk is the only option. Yes in case you can afford ISD call, please contact dear Manish & ask for my e-mail id. Contact me over gmail & then we can move ahead.

    Regarding Home Assure, it’s a not a term plan, it’s a property insurance + accident insurance.

    Thanks

    Ashal

  16. Great. Please do try that. If works smooth wonderful.

  17. “There is no directive issued by the RBI to offer insurance with mortgage loans. Banks should not adopt any restrictive practice of forcing its customers to go in only for a particular insurance company in respect of assets financed by the bank. Customers should be allowed to exercise their own choice. There should be no ‘linkage’, direct or indirect, between the provision of banking services offered by the bank to its customers and use of insurance products.”

    ““If the borrower is forced by his bank to take an insurance policy which is bundled with the loan, the customer should first approach the customer grievance cell of the concerned bank. If the customer’s complaint pertaining to any deficiency in banking service is not attended to by the bank within one month from the date of representation, he can file a complaint under the Banking Ombudsman Scheme, 2006, with the banking ombudsman having jurisdiction over the region in which the concerned bank branch is located.””

    source:

    http://www.livemint.com/Money/4XveITcPyRPO5Pn6DT7KwL/Gunpoint-insurance-what-to-do-when-your-bank-pushes-a-cover.html

    if you wish you could register a complaint in addition to getting the online cover. Once the complaint is in place until resolved the bank is unlikely to act any action
    This will give you enough time to get the online cover.

    Is the bank a nominee in the policy? This maybe the bank rules and the bank may object to you taking an online cover. However you can name the bank as nominee for full loan amt and each year decrease the % and shift the rest to your family.

    QUESTION IS: IS IT WORTH ALL TROUBLE:
    You have paid 37 K premium. Find out the online premium for an amt equal to loan cover. Say it is 5K. So assuming you will get back the 37K you will be spending 37K over 7 years (plus more) instead of one shot. IS this is big deal?

    Although eager to provide you options personally I would be hesitant. Because of the hassle. What I am going to spend over years I have spent in one shot.
    “One could talk like “I could have invested the 37K – 5K and gained and so” but
    its not always about math. In a case like this it comes down to ones mindset.

  18. RD says:

    Thanks Again for your detailed reply.
    I am also exploring options to get another Term plan to seperately cover my home loan and will nominate DHFL as Assignee. I got this idea after reading Comment section on Manish recent post.I am considering ICICI pru online term plan for that.

    About free look up period. Two days back i recieved the policy document (Thanks to them. They delevered it quite late.) and also confirmed with their customer care that my policy is in free look up period.

  19. If you have already paid two EMIs are you sure the policy is still in look-up period? Also are you sure a look-up period is explicitly stated in the brochure?

  20. technically if you have term insurance in place for the home loan amount then no action can be taken.

    So the real issues are:

    1. if you can get a new policy issued within the look-up period then you are on the safe side.

    2. If there is a delay in the issue of the online plan and you don’t cancel the home-loan insurance then you might as well continue that and cancel the online policy within its look-up period!

    3. Suppose you decide to cancel the home-loan insurance whether or not online policy is issued you may be asked to justify why you are doing it.
    A simple “I am not satisfied may not be enough” for this because the insurer will point out that it is a linked product and the loan lender has to be notified.
    This is the troublesome grey area.
    Remember Manish is NOT talking about something similar to this. He is referring to ULIPS and such products.

    So if the online policy is in place you are safe. There maybe some hassles but legally you are safe.,

    If I were you I will try to get the online policy asap, make a request to the online policy provider to expedite you request and hope you get it in time or at least it should be approved in time. Then you could try to surrender the home-loan-policy. Anyway processing should take a few days which should buy you some time.

    But as I said before this is a grey area and maybe better to seek some professional advice on this before proceeding. The professional fee will be much smaller than the 37K premium and you can do this with some peace of mind. You need to act fast.

  21. RD says:

    Thanks for prompt reply.
    Should i need to worry now if DHFL threaten me for this action. I already got the full disbursement from DHFL and my home loan EMI is also get started (paid already two EMI)

    1. Aman Jain says:

      Hi RD,

      One of my relative is also in a similar situation as you have been, it will be a favour if you can provide me your contact detaisl in form of Contact No/E-Mail id on my cell no ( 8860722864 ) or mail: amanjain.838@gmail.com.

      A quick response from your side will be a great help from your side.

      1. Dear Aman, what sort of help you need for your relative?

        Thanks

        Ashal

        1. Aman Jain says:

          Hi Ashal/RD,

          I would like to discuss what can be done in this extra insurance case on property loan as I have paid 1,22,000 for this through loan.

          I am yet to receive the policy papers. Can I talk to you guys on phone, is it will be the best idea.

        2. Aman Jain says:

          Hi Ashal,

          Also, the case is that I will get an opportunity to cancel the ICICI Prud Home Assure Policy, as I will receive it’s papers in some time. So, my point is that I want to reject it within 15 days of cooling period.

          But, from previous posts it seems that I need to have a term plan for the loan amount. So, my query is which Term Plan should I go for and what reason should I give while returning the Policy to ICICI Prud.

      2. RD says:

        Hi Aman,

        Sorry for late reply as i just saw your query.
        You can definately cancel it if its in free look up period and you have some better alternate option but first of all before canceling home loan insurance, pl read home loan agreement. What has been mentioned there for Home loan insurance.

        Initially i also wanted to cancel my home loan insurance policy and wanted to take a Term plan instead but later i decided to stick with Home loan insurance because of below reason.

        1) My home loan insurance is valid for 20 yrs so i dont need to pay insurance premium every year like term plan.
        2) If i transfer my home loan to any other bank. Still some % of insurance premium amount will be refunded to me based on some calculation.
        3) Biggest reson is that it has been mentioned in my loan agrement that i have to inform my lender before canceling home loan insurance and also needed to provide them sufficient proofs that i have some better plan then existing home loan insurance so i dont wanted to take this big headache.

        Pl also raed what “free Financial Calculator” suggested me.

  22. Yes they could inform DHL and you could be threatened with cancellation. Of course you can threaten them back with cross-selling esp if you have an alternate policy in place.

    Manish has stated in the article that this move is risky
    One option:Quickly move and get an online term plan for the home loan amount (minimum). Since time is short, go for a plan which doesn’t need medical tests (although generally not advisable). This will quicken the process. you could then cancel the policy within the look-up period. So by the time DHL is notified (if they are) you will have a policy in place.
    Even if threatened by DHL you could go to the ombusman.

    Disclaimer: Please note this is uncharted waters and could be stressful and big headache for you. So please think before you do this. What I mentioned is only generic advice.

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