SBI Life Insurance will shortly launch a creditor insurance product ?Dhanaraksha? that aims to cover any borrower liabilities in the event of death up to the extent of the loan availed.
The minimum cover is of Rs 10,000 with no upper limit, SBI Life CEO and managing director, US Roy said.
The product has already been approved by the regulator, Insurance Regulatory and Development Authority (Irda).
The product has a provision of reducing term cover of borrowers. The product covers a variety of loans, such as home, vehicle and personal loans, through a group insurance policy with the leading institution.
The idea of launching the product comes from a study which was conducted jointly conducted by the SBI Life and its JV partner, Cardif?a 100% insurance subsidiary of the French banking major, BNP Paribas. The study has revealed that merely 1% of the total population of the country have a creditor insurance product.
Briefing the media about it, Roy, said that ?Given the low penetration, there is a huge potential for creditor insurance in India?. The study was conducted in 8 major cities of the country along with the 18 countries of the world. SBI Life currently has partnership with several institutions for such products which include Union Bank, United Bank, Federal bank, Dewan Housing Finance, Sundaram Home Finance, GE Countrywide, GE Money, SBI Consumer Durables and credit cards.