Bank loan & insurance coverage

Dayal R Kundani (Querist) 13 November 2013 This query is : Resolved
I have drawn a loan from GIC housing loan. The bank also raised a policy from Kotak [ no policy details were provided] against the loan and one time premium was charged accordingly.

The policy was NOT self drawn, i.e I have not drawn any policy on the loan.

Now I have preclosed the loan with in 3 years of inception and shifted to other bank in terms of better interest rates.

The new bank has also charge Insuracne premium.

Here I wish to know the procedure to claim the refund of the Insurance policy which was for a term of 20 years, which means advance premium paid.

Kindly provide your valuable inputs for any procedure to be followed.

Regards

Dayal K

Follow Query

Report Abuse

ajay sethi (Expert) 13 November 2013
contact GIC for your insurance policy details . after obtaining details read terms and conditions for refund of policy . act accordingly

BAALASUBRAMANNYAMM (Expert) 13 November 2013
If you take a housing loan, every bank has to take a policy on the name of "Lonee" and paid premium, from our loan amount. It means, in any case, if the lonee dies, the loan amount should be paid the Insurance company to the banker. If the lonee either pre-closure or wanted to transfer the loan account to another bank,what ever it may be, the paid premium will automatically be cancelled. And hence no question of repayment is arises.

Rajendra K Goyal (Expert) 13 November 2013
Please call for the policy details with all terms and conditions from Bank.

Dayal R Kundani (Querist) 13 November 2013
But its a one time premium for 20 years.

Normally every insurance lender for non-life provides annual policy.

Therefore the premium collected by bank is an advance premium which they have not paid as the agreement of loan stands cancelled on pre-closure.

Had the loan continued, yes, the premium gets allocated to the succeeding years.

The bank should refund the premium collected in excess.

The policy is not stand alone, it would be general policy on the loan amount sanctioned by the bank for all the loanee

Kindly provide your valuable inputs

Rajendra K Goyal (Expert) 13 November 2013
You can ask the policy details from Insurance Co.and if the cover is available for 20 years, you may ask your new Banker not to take new policy and if already taken cancel it and refund your premium. you may ask the previous insurance Company to enter the name of new Banker in the policy.