SBI Life RiNn Raksha Policy: Review, Benefits and Details

SBI Life RiNn Raksha Policy :- A person does not hesitate to take a loan to fulfill his financial desires. Buying a car, buying a big property, child’s education or marriage, buying a house, etc. all require loans today. With attractive interest rates, flexible loan tenure options and easy EMIs, credit is more than a viable option for today’s highly qualified, educated and employed population.

But what if the worst comes to pass, and you are no longer able to earn and support your family? What happens to your outstanding debt and those responsible for repaying it? Your house which is purchased on loan, your car and your assets under the loan will be confiscated by the bank. That’s where the SBI Life RiNn Raksha Group Credit Life Insurance Plan comes in. This will take care of all your outstanding credit in the event of your death (or if you opt for the rider for disability).

SBI Life RiNn Raksha Policy

SBI Life RiNn Raksha is a Group Credit Life Insurance Plan offered by SBI Life Insurance Company Limited. This plan can be opted by those who take loans to save their families from repayment obligation.

SBI Life RiNn Raksha policies provide coverage for a wide variety of loans. It offers death benefit, surrender benefit and tax benefits to the members. It also offers additional options for loans that have floating interest rates. Apart from the primary borrower, it covers the life of a maximum of 2 co-borrowers. Policyholders can choose to add Accidental Total and Permanent Disability Benefit riders to the plan in SBI Life RiNn Raksha Policy.

SBI Life RiNn Raksha Policy Details

SBI Life – RiNn Raksha is a group credit life insurance plan that will pay your loan EMIs in the event of your death. The premium for the plan will be paid by the financial institution from where you will borrow the loan.

So, if you have taken a loan and need protection for your family, consider SBI Life RiNn Raksha Plan. To get an overview of the same you can also check the plan features given below.

Features:

• life insurance coverage
• Help in repaying various types of loans
• Coverage for Co-Borrowers
• Option of Gold or Platinum Plan Options
• Choice of cover period, premium payment term and frequency

Advantages of SBI Life RiNn Raksha Policy

SBI Life RiNn Raksha policy has many benefits:

• This is a comprehensive, customizable benefits package that covers your debts while you are no more (or if you become disabled when the rider option is taken out.)
• Initially there are options to increase the coverage up to 120% of the loan.
• You can choose a cover amount that is less than the total loan outstanding at the time of taking the cover.
• Apart from the primary borrower, a maximum of 2 co-borrowers can be covered. Cover for co-borrowers can either be:
• Every borrower is insured for the full outstanding loan amount. In case even one of the borrowers dies, the entire outstanding loan is paid and the surviving borrower becomes eligible for the applicable surrender value.
• Each borrower is insured only for his respective portion of the loan. Even if the borrower dies, cover continues for surviving borrowers.
• The premium can be paid in flexible terms. An individual can pay the premium upfront as a single premium or choose to pay level premiums for 5 or 10 years.
• Financial institutions may fund the premium by incorporating it into the loan amount.
• Moratorium period allowed is 3 months to 72 months (6 years). Disbursements during this period may be staggered. According to the interest applicable, the amount of cover can either increase or remain constant.

Plan Coverage – What is included in SBI Life RiNn Raksha Plan?

SBI Life – RiNn Raksha Plan provides protection against loans in the event of disability/death. This loan includes various loans such as car loan, home loan, education loan, personal loan and agriculture loan. The plan allows people to choose the loan cover tenure. If the loan tenure is at least 15 years, then the minimum cover should be 2/3 of the loan tenure. For loans with floating interest rate, it offers the following 2 options:

• Gold Option – This option is available only if the policy tenure is at least 5 years. If this option is opted by a member, then in case of his death during the policy term, the Company will pay the total outstanding amount as per the floating rate of interest offered by the member, irrespective of the loan schedule mentioned in the COI (Certificate of Insurance). Whatever it may be. Benefits will be paid only when the due premium has been paid in full and the policy is active for the member.
• Platinum Option – This option is also available for policy tenure of 5 years and above. If this option is selected by a member, then in case of his/her death during the policy term, the company will pay the outstanding loan amount as per the floating interest rate or the outstanding loan amount as per the interest rate. Which was fixed at the beginning of the cover (mentioned in COI).

Note – To avail any of the above 2 options, members must adhere to the terms and conditions of the policy.

SBI Life RiNn Raksha Policy Benefits

Death Benefit:

In case of death of a member during the policy term, the company will pay the sum assured as per the option (Gold or Platinum) chosen by him. If he has not selected any option, the Company will pay the Sum Assured as per the schedule mentioned in the COI. This benefit will be paid once all the outstanding premiums have been paid by the member. If all outstanding premiums have not been paid by the member who has died, the following will apply:

If the member dies within the grace period, the company will pay the sum assured after deducting the outstanding unpaid premiums as per the schedule mentioned in the COI.

If the member dies after the grace period and the policy is paid-up, the company will pay the paid-up Sum Assured.

If the member dies after the grace period and the policy is not paid-up, the company will not pay any death benefit.

Paid-up Sum Assured = (No. of premiums paid/No. of premiums payable) x Basic Sum Assured on Death.

Further, if a member dies after making a request for surrender but before paying the surrender value or after requesting for cancellation of cover during the free look period but before paying the premium, then Nominee/Master policyholders will be eligible to receive the death benefit. The insurance cover will be canceled on the date of death.

Coverage for co-borrowers

If the initial sum assured and the loan amount are the same for each borrower, then:

In case of death of one of the borrowers during the policy term, the company will pay the death benefit to the nominee as per the schedule mentioned in the COI. Coverage for surviving members will cease and they will receive surrender values (if any).

If the claim is rejected in case of death of a co-borrower during the policy term, the company will not pay the death benefit and coverage will continue for the surviving members.

If more than one borrower dies simultaneously, death benefit will be paid for only 1 borrower. The company will assume that the younger member died after the older one. Surrender value (if any) will be given to members who have not received the death benefit.

If the initial sum assured for each borrower is equal to his/her loan portion, then:

In case of death of any member during the policy term, the company will pay the death benefit for the member who has passed away. The benefit will be paid as per the Sum Assured schedule mentioned in the COI. Benefits will be paid on the basis of the cover to which the particular member is entitled and the coverage provided will be limited to his loan portion. Coverage for surviving members will continue till the end of the policy term as long as the premium is not paid on time.

If the claim is rejected in case of death of any member during the policy period, the company will not pay any death benefit and coverage for the surviving members will continue till the end of the policy period, provided they pay their premiums. Do it on time.

Surrender benefit

Surrender is permitted after the first year of the policy term. Surrender Value (SV) will be paid if all the first year’s premiums have been paid. The surrender benefit will be paid by the company only if the minimum amount is Rs 250. In case of co-borrowers, surrender by one individual will not affect the coverage provided to the other members.

Benefit paid will be higher of SSV (Special Surrender Value) and SV Surrender Value = (50% of premium paid) x (Unexpired Term/Total Term).

If the policy is surrendered by the master policyholder, but the premiums have been paid by the insured members of the group, then the individual members will be given the option to continue the plan as an individual policy. Note – The period will be calculated on the basis of number of months completed. Unexpired Policy Term refers to the total term minus the months completed on the date of surrender.

Death Benefit if Sum Assured = Entire Loan Amount for each borrower

Upon the death of the insured person, the insurance company will pay the death benefit specified in the certificate of insurance. And the surrender value (if any) will be payable to the surviving life assured and the policy will lapse.

Note – In case of simultaneous death, death benefit is payable to only one borrower.

Death benefit if sum assured for each borrower = a part of his loan amount

If the insured person dies, the insurer will pay the death benefit as per the certificate of insurance up to his share. And the policy continues to survive for the insured till the end of the term, provided the premiums are paid regularly.

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SBI Life RiNn Raksha Policy FAQS