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Get 100% of annual insurance premium payable

  • Key Features
  • Terms & Conditions

The following are the features of the Insurance Premium Finance Product:

 

Eligibility 

Individuals, limited companies, engaged in manufacturing/trading activities not prohibited by law. 

In case of Traders, the business should have been established preferably for more than –1- year. 

Purpose 

For payment of  premium to insurance companies for  covering insurance of machineries and other assets 

Limit 

100% of annual insurance premium payable 

Rate of interest  

Flat Rate as per Schedule attached 

5. 

Method of Calculation of Interest 

At the Flat Rate on Principal 

Repayment 

Loan to be repaid in equal monthly installments within a maximum period of –10- months.  

Security/ Documents 

  1. Loan application 

Tripartite Agreement amongst the Bank, the borrower and the Insurance Company. 

 

  1. –10- post dated cheques are to be obtained for the amount of monthly instalments at the beginning 
  2. First cheque is to be collected upfront before disbursement of the loan. 
  3. Entire amount of loan is to be disbursed after the first cheque is collected and deposited in the loan account. 
  4. The loan is to be disbursed and the proceeds are to be remitted to the Insurance Company directly by means of a forwarding letter detailing the terms of sanction. 
  5. Interest is to be charged in the account at the flat rate on the principal amount of loan sanctioned for the period the loan is sanctioned. 
  6. In case any of the cheques bounce back due to  insufficient fund in the account following steps are to be taken 

 

    1. The matter is to be referred to the borrower and the Insurance Company and the contract of insurance is automatically gets cancelled.                                     
    2. The Insurance Company is to be advised to refund the amount of insurance premium for the unexpired period of insurance and cancellation of the contract. The amount refund is to be calculated as per following formula :  
      AIP x UPIC (no of days) 

      Refund= —————————————- 

      365       

                  AIP= Annual Insurance Premium 

      UPIC= Unexpired period of the Insurance Cover (No. of days) 
    3. After the refund is received from the Insurance Company the loan account is to be closed after adjustment of the refund money.  
    4. Normally there should be no outstanding after adjustment of the refund money from the Insurance Company. But in case there is any outstanding follow up is to be made with borrower to get the account adjusted immediately.  
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