Benefit to the Financial Institution - Max Life Group Credit Life Premier Plan is a product that ensures that in case of death of the borrower, amount of loan outstanding (as per the option chosen) is paid out by the insurer.
- The product provides a value added feature of low cost protection along with the loan offering making it attractive for the customers
- Safeguards against NPAs on account of an unfortunate event , like death of the borrower
Benefit to the loan borrower - In case of member's demise, the family does not have to surrender / forgo the asset since loan will be paid out for the amount of sum assured by the insurance company.
- In case of an eventuality, the member's family is relieved of the loan liability
Please note that the benefit is payable only in the event of death during the period of coverage or in case of Total & Permanent Disability (TPD) caused due to accident provided the member has opted for Accelerated benefit
The Benefits at a glance
Death Benefit and Options The product in its basic form enables the member(s) covered under this scheme to protect himself/herself and his/her family from burdensome loan obligations in the unfortunate event of Death. It also protects the Bank from the increased default risk resulting from an unfortunate event of death of the borrower. The risk cover shall terminate post payment of the primary benefit.
Level Cover* - The Risk Cover or Sum Assured will be same throughout the Coverage Term. This is applicable only to interest only loans
Decreasing Cover* - The Risk Cover or Sum Assured will reduce as per the Sum Assured Schedule (SA Schedule) derived using the Loan Interest Rate & the Coverage Term at the time of coverage inception. Our liability will be determined basis the SA Schedule and not the Actual Outstanding Loan Amount at the time of claim.
Moratorium Option Moratorium period under the plan is available for both Level & Decreasing Cover, during which the members shall be given an option to service or not service interest payments. Moratorium Period of 1 (one) month to 10 (ten) years (in multiple of 1 month) can be chosen under the plan.
The product ensures that the member and his/her loved ones are protected from the financial burden of loan in case of an eventuality. Thus, it is advised to continue the risk coverage through the term. The coverage shall continue as per the agreed terms & conditions even if the loan is repaid. However, if member surrender the risk cover due to foreclosure of loan, prepayment of loan or any other reason, a surrender value shall be paid. The surrender value payable at any point of time during the coverage term will be derived as follows:
70% of the Premium (excluding taxes and cesses) received in respect of member * Term Factor * SA Factor
Term Factor = Unexpired Policy Term in months (ignoring days) divided by Original Policy Term in months
SA Factor = Outstanding Sum Assured (as per the Certificate of Insurance) divided by Maximum Sum Assured until the date of Surrender (as per the Certificate of Insurance)
The risk cover under the policy will cease after the surrender value has been paid.