POSTED BY Umesh Thorat ON December 29, 2011 9:32 pm COMMENTS (5)

Hello Sir,
In December 2011, i applied for SBI Home Loan(HL) & while filling up the form i clicked for SBI LIFE, as it was optional. Now SBI has sanctioned me HL alongwith SBI RinRaksha Insurance cover. The insurance cover reduces with principal of HL. SBI is giving me this insurance amount @10.5% (home loan interest rate), which they will pay to SBI Life directly. I think LIC’s Jeevan Amulya is a better plan where a sum assured is constant throughout & legal heirs can utilise the rest of the amount after repaying the loan. I have excuted the documents & paid the processing fees. When i got the accepatance letter from SBI, it was clearly written as “optional” . Now when i request them to cancel the SBI LIFE, the bank is saying that i will have to pay the Processing Fees again.Also the document execution will be done again(franking). Kindly advise me , as i am more interested in LIC’s Term Plan rather than SBI LIFE-RIn Raksha

5 replies on this article “SBI LIFE- RIN RAKSHA”

  1. Dear Umesh, you are right on your thinking. Please be ready to fight it out with the Bank. By the way, the 76K prem. ‘ll not be recovered in 5 or 6 installments. This 76K amount ‘ll increase your EMI by some 600 to 700 Rs. or more (depending upon the term of your loan) & thus you w’d have to pay back this 76K amount over the period of your loan.

    I belong to Ahmedabad, Gujarat, so do not know any direct agent or person of SBI Life. You may visit any other branch of SBI or even the same branch from where the loan was processed & you ‘ll get agents’ contact nos. or details.



  2. Dear Umesh, there is more to it. This Mortgage term cover policy is purchased (or being) to you by bank under single prem. payment to insurer i.e. SBI Life. Interestingly this single prem. has been added to your sanctioned loan amount & you w’d have to pay increase EMI based upon this extra component in your loan. this is also a reason, bank is asking for redocumentation as well as fresh payment of processing fee. Say the prem. was 80K Rs. you ‘ll be paying back this 80K prem. to bank with a hefty interest as charged on to your basic loan.

    If you opt that smart shield policy, you w’d have to pay yly prem. from your own pocket but the cover ‘ll remain 25L or 35L or 50L as chosen by you.



    1. Umesh Thorat says:

      Thanks for your reply . As you have said the bank has already added this insurance amount seperately to my loan account(Rs.1571000Home Loan+ Rs.76200 as SBI Life cover).They will be disbursing the insurance premium in 5years , say Rs.15000/yr to sbi life. They are taking the same interest rate against this Insurance Amount as of home loan. Now, they are saying that i will have to redo the processing etc which i didnt agree. I had earlier taken HL from Bank Of Baroda(BOB). They had sanctioned me loan of Rs.3lacs at that time and i took only 2.75lacs from them. Now here also neither i utilise the 100% sanctioned loan nor did i redo the processing-franking etc. My view is this ke bank is threatening me by virtue of this processing-franking , so as i should not withdraw from SBI Life and they should not loose their commission. It should be my decision whether i want to avail the entire fund made available to me by bank or not. Can you please suggest me any of the SBI Life agent or so in mumbai-thane-navi mumbai area who can deal with this issue with SBI HL Section and can help me to opt for its term plan.
      Thanks once again

  3. Abhishek says:

    Adding to Ashal’s comments, you can also have a look at the premium u r paying for the cover. IF there is no significant difference in the premium vs the term plan, you can continue with the same..


  4. Dear Umesh Thorat, the plan you mentioned is a mortgage term cover. If you want to go for a constant term cover like LIC’s Amulya Jeevan, You may opt for SBI’s Smart Shield. Please check with bank officials for the same for processing fee & redocumentation issues.

    By the way, if the bank insists on redocumentation as well as processing fee, I ‘ll ask you to opt for Max Gain home loan from SBI itself, if not opt already.



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