- Loan insurance is compulsory for all types of loans.
- The insurance cover is provided to all loans ie HBL/MHIL/MCL/PCL.
- If the loan is disbursed in one lumpsum, then one time non-refundable contribution towards loan insurance will be recovered from loan amount.
- In case the loan is disbursed in instalments then contribution will be recovered from the amount of instalments.
- In case an individual opts to repay the loan in higher number of instalments, additional amount of contribution toward loan insurance will be recovered for enhanced period of repayment of loan.
- In the event of death of loanee, the principal outstanding as on the first day of the month in which death occurs will be adjusted and no loan amount will be recovered from the death benefits payable to the nominee from AFGIS.
- The year wise break down of one time non-refundable contribution for 1,00,000/- of loan is as follows :
| Term (Years) |
Amount of Contribution
(Per Lakh) (wef 01 Dec 23) |
| 1 |
253 |
| 2 |
486 |
| 3 |
685 |
| 4 |
854 |
| 5 |
1011 |
| 6 |
1158 |
| 7 |
1294 |
| 8 |
1421 |
| 9 |
1549 |
| 10 |
1681 |
| 11 |
*1803 |
| 12 |
1916 |
| 13 |
2023 |
| 14 |
2121 |
| 15 |
2223 |
Note
1. One time non-refundable contribution will be calculated for amount in multiples of Lakh
and the tenure (no of years) of the loan.
2. Fraction of a year will be counted as one full year.
Example calculation
Loan sanctioned amount : 5.93 Lakh
Tenure of Repayment : 125 EMIs (10 years 5 months)
Tenure for calculation of contribution : 11 years
Total loan insurance contribution
: 1803 X 5.93 = 10692/-