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sudheer (Admin )     06 October 2020

Death insurance claim ( house loan )

Dear sir , One of my friend  has housing loan , he has taken insurance against loan, recently he expired  after follow up insurance company released amount , they transfered amount to nominee , do we need to clear total loan amount with recieved amount immediately , what is the procedure to settle loan ,  what will be the maximum time lines legally to settle , what are the pros and cons 


 4 Replies

Adv Vinay Mathur + 8447131770 (Advocate)     06 October 2020

You need to pay back the home loan from the money you have received against insurance.

You contact the bank for the same. if you want loan again they will give you as per the policy of the bank.

G.L.N. Prasad (Retired employee.)     07 October 2020

The Bank is expected to close the loan and inform nominee or legal heirs after receiving the insurance claim.   There should not be a any delay in liquidating the balance.

Either you can inquire personally or the legal heirs or nominees may file RTI Application to the concerned Bank seeking information as follows.  If the bank is private no need to enclose any fees and one can demand in capacity of consumer.


The subject on the information sought":  Death of Home loan Borrower:  Name:                                         Account no.

Information solicited:

1.Please inform the date of receiving such claim from the insurance company and provide statement showing such adjustments of claim and further status.

2.Please inform further procedure to be followed for delivery of title deeds deposited with the Bank by legal heirs.


SIVARAMAPRASAD KAPPAGANTU (Retired Manager)     07 October 2020

Normally, the claim money related to  insurance linked to loan is received by bank directly and they adjust it to the loan account.You are informing Nominee received the claim amount.


In any case, it is the bounden duty of the Legal Heirs/Nominee to repay the loan immediately. Please contact the bank branch concerned and act as per their guidance. 

If entire loan is cleared by legal heir/s, title deeds shall be released to the lega heirs after they are identified as such as per bank procedure.


In case the legal heit/s is/are eligible for a loan as per bank norms, bank may permit the loan transferred to such legal heir/s. It's the discretion of the bank.


If you do not take any action, bank may initiate recovery steps by filing a mortgage suit, as the house purchased with the loan surely must be under their mortgage and title deeds are with bank.


Such information will be readily available with the Bank concerned from which your friend took the loan please.

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