Group Insurance 303 views February 5, 2021

If you have any loan running in your name and want a cover for the same in case of your death, the Bharti AXA Life Group Loan Protect plan is the one you can trust! A non-linked non-participating group life insurance plan that will safeguard your family in such unforeseen circumstances. All the borrowers of the Master Policyholder (lender) are eligible for life cover under the Bharti AXA Life Group Loan Protect plan. Under this plan, the insured members can choose from three premium payment term options – single pay, limited pay and regular. There are multiple coverage options on your disbursed loan amount. The master policyholder can customize your insurance cover as per your outstanding loan liabilities. Let’s know more about the policy on this page below.

Type of Cover Under Bharti AXA Life Group Protect Plan

There are three life cover options available under this plan from which the master policyholder can choose.

Reducing Sum Assured Benefit – If the master policyholder chooses this option, each insured member will be insured for a sum insured equal to the balance outstanding at the beginning of each month as per the loan tenure. An amortization schedule helps determine the balance outstanding based on the interest rate fixed at inception. In the case of Reducing Sum Assured Benefit cover, on the death of the insured, a sum assured equal to the outstanding loan as per the loan reduction schedule fixed at inception will be payable to the nominee at the beginning of the month.

Level Sum Assured Benefit – Under this, each insured member shall be insured for a sum assured equal to the amount chosen at inception and the same will be fixed for the coverage term. In the case of Level Sum Assured Benefit cover, if the insured dies, an amount equal to the sum assured throughout the coverage term will be payable to the nominee.

Level + Reducing Sum Assured Benefit (Moratorium Cover) – With the moratorium cover, the insured member sum assured will remain fixed during the moratorium period but it will reduce thereafter at the applicable interest rate. Here, the balance outstanding will be determined as per the amortization schedule based on the interest rate fixed at inception.

Benefits of Bharti AXA Life Group Loan Protect Plan

This policy is designed for borrowers/co-borrowers of public sector banks, co-operative banks, small finance banks, microfinance institutions and housing finance companies. Under  Bharti AXA Life Group Loan Protect Plan, the lender must submit all scheme related information requested by the insurance company, based on which the scheme will be approved and the borrower/co-borrower can get the following benefits –

Death Benefit – If the insured member dies during the policy term, provided all premiums are paid till the date of death and the policy is in force, the nominee will get a death benefit as per the option chosen by the master policyholder.

Maturity Benefit – Bharti AXA Life Group Loan Protect Plan doesn’t have any maturity benefit.

Surrender Benefit – In case the insured decides to cancel the policy during the policy term post the free look period, the surrender value will be payable to him/her.

Surrender Value = (SVF) x (U/T) x (P/PP) x (OS/IS) x P

Check out what the following terms used in the Surrender Value’ calculation denote –

  1. SVF – Surrender Value Factor
  2. P – Premiums paid till the date of surrender (excluding taxes, modal loading and extra premium, if any)
  3. U – Unexpired Coverage Term(in month)
  4. T – Coverage Term (in months)
  5. PP – Total premiums payable (excluding taxes, modal loadings and extra premium, if any)
  6. OS – Outstanding loan at the time of surrender
  7. IS – Sum assured at policy inception

Note – No surrender benefits are payable for regular premium paying policies.

Eligibility for Bharti AXA Life Group Loan Protect Plan

If you want to buy Bharti AXA Life Group Loan Protect, ensure you meet the following –

  1. Minimum age at entry – 15 years (education loans) and 18 years (other types of loans)
  2. Maximum entry age – 70 years
  3. Maturity age – 75 years (single life) and 75 years – age of the older insured member (joint life)
  4. Minimum group size – 50 members

Additional Features of Bharti AXA Life Group Loan Protect

With the Bharti AXA Life Group Protect, you will get the following features too –

  1. Joint Life Cover – The insured can add one additional life under Bharti AXA Life Group Loan Protect. And the additional life must share the loan liability with the primary loan borrower. The policy coverage will be extended only if the loan is jointly held in the names of both lives. In the case of the first death, the death benefit shall be payable to the master policyholder for settling the outstanding loan amount. The balance will be payable to the beneficiary and the policy coverage will be terminated.
  2. Limited Coverage Term – You can opt for a limited coverage term where the cover term is lower than the actual loan tenure. This option can be chosen at policy inception only.
  3. Continuing Insurance Cover – If the insured forecloses the loan, the cover shall continue till the end of the coverage term or death, whichever is earlier, as per the original terms of the policy. However, you may also choose to surrender the policy if you don’t want to continue the coverage.
  4. Lower Coverage Amount – You can opt for a lower coverage amount lower than the loan disbursed at inception.
  5. Optional Accidental Death Benefit – For additional coverage, you can get the additional death benefit rider by paying an additional premium for the same. With this rider, the beneficiary/nominee will get an additional sum assured in case of death due to an accident.

How to Sign Up for Bharti AXA Life Group Loan Protect?

To enroll under Bharti AXA Life Group Loan Protect, you need to fill and sign the self-filled questionnaire cum enrollment form. For this, you do not require a medical check-up if your proposed coverage amount is less than the underwriting limits as defined for your age.

Claim Process for Bharti AXA Life Group Loan Protect

If the risk arises during the policy term, the nominee needs to follow the below instructions to claim the Bharti AXA Group Loan Protect benefits –

  1. Report about the death of the insured to the master policyholder
  2. Submit the certificate of insurance, copy of death certificate, copies of medical reports, death claim form (signed by both nominee and master policyholder)

Note – If any other documentation is required by the company, the nominee should submit the same as soon as possible.

Terms and Conditions of Bharti AXA Life Group Loan Protect

  1. Minimum sum assured – INR 10,000
  2. Coverage term – From 2-30 years
  3. Moratorium cover – From 0-7 years

Note – For all mortgage and education loans, the maximum moratorium cover will be 7 years.

  1. Premium payment modes – yearly, half-yearly, quarterly and monthly
  2. Premium payment is available via ECS only
  3. The coverage term will correspond to the loan term as on the date of the inception of insurance cover.
  4. Certificate of Insurance is issued once you are enrolled under the coverage. Later this can be used as proof of payment to claim tax benefits.
  5. If the insured member dies during the coverage term, Bharti AXA Life shall pay the death benefit to the beneficiary
  6. On survival of the insured till the end of coverage term, the coverage under the master policy with the policyholder will be terminated and no benefit shall be payable to the insured or the policyholder.
  7. Free look period – 15 days
  8. Grace period – 15 days (monthly mode) and 30 days (yearly, half-yearly and quarterly)
  9. Revival is made within five years from the date of the first unpaid premium

Exclusions Under Bharti AXA Life Group Loan Protect

The payment of Bharti AXA  Group Loan Protect benefits is subject to suicide exclusion. In the case of death of the insured member due to suicide within one year from the date of risk commencement or revival of the policy, provided the policy is in force, the nominee or beneficiary will get either 80% of the total premiums paid or the surrender value as on the date of death, whichever is higher.

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