Insurance on a car loan in case you die

caliper · 9th July 2007, 17:51

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?

Hellcat · 9th July 2007, 18:15

Insurance on Loan in case of death do exist for Home loans and personal loans, but have never heard of Car loans.

Hellcat.

moralfibre · 9th July 2007, 18:58

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.

LLL · 9th July 2007, 19:36

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...

caliper · 9th July 2007, 19:54

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?

LLL · 9th July 2007, 20:15

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

msdivy · 9th July 2007, 20:16

Quote:

Originally Posted by caliper

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.

djay99 · 10th July 2007, 16:50

SBI has this facility for car loans by default.
Check the details on bank site.

9th July 2007, 17:51	#1
caliper BHPian Join Date: May 2007 Location: India Posts: 160 Thanked: 3 Times	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?
	() Thanks

9th July 2007, 18:15	#2
Hellcat BHPian Join Date: Jul 2005 Location: Bangalore Posts: 222 Thanked: 5 Times View My Garage	Insurance on Loan in case of death do exist for Home loans and personal loans, but have never heard of Car loans. Hellcat.
	() Thanks

9th July 2007, 18:58	#3
moralfibre Team-BHP Support Join Date: Dec 2004 Location: MH-12 Posts: 8,449 Thanked: 13,965 Times	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.
	() Thanks

9th July 2007, 19:36	#4
LLL BHPian Join Date: Mar 2005 Location: Delhi Posts: 635 Thanked: 2 Times	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...
	() Thanks

9th July 2007, 19:54	#5
caliper BHPian Join Date: May 2007 Location: India Posts: 160 Thanked: 3 Times	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?
	() Thanks

9th July 2007, 20:15	#6
LLL BHPian Join Date: Mar 2005 Location: Delhi Posts: 635 Thanked: 2 Times	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
	() Thanks

10th July 2007, 16:50	#8
djay99 Senior - BHPian Join Date: Jun 2007 Location: Ireland Posts: 1,475 Thanked: 544 Times View My Garage	SBI has this facility for car loans by default. Check the details on bank site.
	() Thanks