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POSTED BY ON February 19, 2013 12:59 pm COMMENTS (14)
Hi admin,
i recently visited SBI HO for Housing loan of Rs 30 L. They asked me to take 2 types of insurances- General and SBI Rinn Raksha. Which one is mandatory? what is the difference between these two insurances?
Thanks
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I have taken housing loan in SBI. They asked to put SBI RIN RAKSHA INSURANCE policy. I have nominee of my father in insurance. Unfortunately father expired. Wheter claim cover nominee or not
Not fully. Nominee is a custodian at the end of the day!
Dear Neeraj, in this poliocy you paid upfront payment for 20 or 25Y (as per your loan term) but used the policy only for 10Y, that’s why there ‘ll be a money back for a discounted prem. Here Discounted Prem. means you paid lower amount than a regular policy as you paid upfront single prem. & already completed 10Y in the policy, hence the residual value in your policy is not the same as at the time of start.
Thanks
Ashal
the policy is pure term plan(sbi smart shield)
my doubts:
what is “discounted” premium?
and why refund of policy money as its pure term plan?
i want to close as i dont want to go for this policy but i am forced(as i need loan)
i guess it will serve it purpose for 10 years for which it was taken
Dear Neeraj, yes, you can withdraw at that time but as you are already paying a discounted prem. in this policy, the refund amount at that time after 10Y ‘ll be very low.
Thanks
Ashal
i got it.
i am having one doubt.
loan of 30L 30 years
policy of 30L 30 yrs
i close loan after 10 years
can i withdraw policy after 10 years since i am not having first right of policy?
Dear Neeraj, in your loan linked policy, bank ‘ll not be nominee. the policy ‘ll be assigned to bank. An assignment overrules even nomination. The person who advises you regarding nomination in favor of bank, was either ignorant or just do not want to share the true info.
For example when you are taking a loan against your insurance policy, the policy ‘ll be assigned to the lender. in case your death happens, the first rights on claim amount ‘ll be of the lender & only after settlement of it’s dues, the remaining amount ‘ll come to nominee.
Thanks
Ashal
who should be the nominee?
bank or home loan applier?
bank told me that bank will be the nominee as if nominee refused to give money than how we will recover amount.
please clarify this thing.
Thanks to all for your suggestions..
Dear Amit, when you apply for a home loan in SBI, there are 2 types of insurance on offer.
1. General Insurance – property Insurance for the building against risks arising due to natural calamities & fire.
2. Life Insurance – It’s for your life, if some thing happens to you, the life insurance ‘ll provide the sum assured to repay the loan.
Neither is mandatory but as you are in need of a loan from SBI, the staff ‘ll exploit your situation for cross selling the products from sister cos. (SBI Gen. Ins. & SBI Life Ins. in this case).
In my personal choice, please opt general insurance from SBI General but instead of Rin Raksha, please opt a regular Term cover from SBI Life itself (to satisfy cross sell) for term cover say 1Cr. as per your actual need. In this case you w’d have to pay regular prem. on yly basis for next 20-25-30 Y as per your policy term.
Thanks
Ashal
I have taken similar loan from SBI for 34 lacs. For general insurance its one time payment for insurance for property against, fire, earthquake or any other natural calamity.
For Rinn Raksha, i m paying 5 yr premium paying term against my 20 yr loan. ie. 20,000/- per year. The insurance amount is directly linked to your outstanding loan amount. you are insured against the outstanding loan only. I am not insurance or loan expert but this is my experience. So pl dont consider my view as final.
General insurance means property insurance in case something happens to property- What will be the benefit to me in case something unusual happens? Will the general ins company pay me the amount of damage for restoration of house property?? Further what is the premium for 30 lakh loan? Is premium payable for 1 yr or till 20 yrs of loan?
SBI Rinn Raksha means like term insurance wherien if something happens to me then the insurance company will pay to the bank.. How the premium is payable in this case?
Am i correct?
Property insurance is mandatory in SBI. This will cover you, in case something happen to your property due to natural disasters. But you can deny home loan insurance. Instead you can opt for some term insurance.
For home loan there is no need to buy any insurance policy so you can deny them upfront. Also insurance polices are not a good insurance.
But they may ask you to take a home loan insurance that is to cover the home loan incase somthing happens to you during home lon payment. The one time payment is around 75, 000. You can easily deny this by taking term insurance or if you have any other life insurance policies or by showing assets such as gold, land, etc.