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Old 9th July 2007, 17:51   #1
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Default Insurance on a car loan in case you die

Is there something such as insurance on a car loan in case you die or are otherwise incapacitated so your wife/family are not burdened with a car loan or do not have to sell it off?

Is this included as a standard procedure with most car loans (such as ICICI/UTI/etc.?) Yes, I know some people don't like ICICI, but it's also the No. 1 financier, for better or worse.

Or do you get it from outside? Such as LIC or Prudential, etc.? Would it be just normal term insurance? And what if you die, would your family have to show all sorts of paperwork, FIR, marriage certificate or birth certificate, etc., or is payment just straigtforward made to the nominated person in the policy?
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Old 9th July 2007, 18:15   #2
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Insurance on Loan in case of death do exist for Home loans and personal loans, but have never heard of Car loans.

Hellcat.
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Old 9th July 2007, 18:58   #3
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SBI did have an insurance for the car loan that I took but I did not opt for it for two reasons:
1) I am very optimistic about my survival.
2) The premium asked (although not much) was to be paid each year .

But to answer your queries, there are a few banks that offer an insurance but they become suckers in case you decide to claim insurance. No one is going to foreclose a loan incase the outstanding is close to a few lakhs by taking a paltry premium.
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Old 9th July 2007, 19:36   #4
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workaround....

the car owner can get a straight life insurance for amount of car loan...

So in case of the unfortunate event, the nominee can pay off the car loan from the funds received from life insurance company...
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Old 9th July 2007, 19:54   #5
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Thanks for the replies.

So, does anybody know what the approximate cost of a life insurance policy for 8.5 lakh for 5 years should be?

Or should you go for a longer term than the length of the loan?
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Old 9th July 2007, 20:15   #6
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5 years, 5 lakhs, age: 31 years

Yearly : 1,337.00
Half yearly : 675.00
Single : 5,025.00

check out LIC - anmol jeevan plan

Life Insurance Corporation of India
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Old 9th July 2007, 20:16   #7
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Quote:
Originally Posted by caliper View Post
Thanks for the replies.

So, does anybody know what the approximate cost of a life insurance policy for 8.5 lakh for 5 years should be?

Or should you go for a longer term than the length of the loan?
I would suggest going for a 5 year Term policy. Depending on your age a single premium for 5 year policy would cost between 7K~9K (or about 2K per year for 5 years).

Please visit: Life Insurance Corporation of India.Choose a term policy and find out the premium.
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Old 10th July 2007, 16:50   #8
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SBI has this facility for car loans by default.
Check the details on bank site.
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