You, the Master Policyholder/ Member may choose any of the below benefit options at the inception of the policy term or member cover term.
A. Decreasing cover
Fixed Rate: Under this cover type, Sum Assured decreases over the cover term as per initial cover schedule mentioned in certificate of insurance (COI). The COI will be generated at loan interest rate for which premium is charged and cover amount will not fall below `5,000. Single and limited premium payment options are available under this cover.
Floating Rate: Under this cover type, Sum Assured decreases over the cover term as per the cover schedule mentioned in COI as per the loan interest rate at inception of policy. However, when interest rate changes the loan outstanding will be recalculated with the revised interest rate keeping the EMI as at time of inception constant and revised COI will be generated at the time of claim. For the purpose of cover, fluctuations of upto +/- 500 bps from interest rate at inception is allowed and cover amount will not fall below Rs. 5,000. Increase in loan outstanding due to EMI default would not be covered. Single and limited premium payment options for cover term greater than or equal to 5 years are available under this cover.
B. Level cover
Under this cover type, Sum Assured remains level throughout the term of the cover as per certificate of insurance. Single, Limited and Regular premium payment options are available under this cover. Level cover would be applicable for following scenarios:
1) Interest only loan
2) Member wants to avail a level cover irrespective of loan type for simplicity and wants protection against the possible increase in loan interest rate scenario leading to increase in outstanding loan amount as compared to initial cover schedule.