Policy Summary
Group Credit Life Assurance provides life cover to a group of borrowers of credit institutions (banks, retail finance providers etc.) with the life assured being the borrower and the credit institution being the beneficiary to the extent of the outstanding loan. In the unfortunate event of death of the member during the term of the policy, the outstanding loan amount would be repaid by the insurance company thus relieving the member’s family of the loan liability and eliminating risk of loss due to death of the borrower to the credit institution.
Benefits of Group Credit Life Assurance
1.. Eliminates risk of loan default in the event of death
In the event of a member’s death, the insurance company will take on all loan amounts and pay the credit institution.
2. Financial relief to the family
The borrower’s family is relieved of the financial and emotional burden of paying the outstanding loan amount.
3. Facilitate competitive pricing for lender
With greater financial security, a credit organization now has an edge over competitors and can afford to price credit products at more competitive rates to attract customers. The customers also benefit with better rates on loans.
4. Cost-effective plan
Since it works on group buying principle, the cover is extremely cost effective.
5. Convenient administrative and medical procedures
The documentation process is hassle-free, and the medical examination norms are relaxed (subject to applicable conditions). However non-medical limit will vary by loan type, borrower’s age and tenure of the loan
