Obtaining a loan is an accomplishment, but it also brings long-term financial obligations. You often overlook one critical aspect: ensuring that you protect this significant financial commitment against unexpected events. SBI RiNn Raksha steps in as a home loan insurance plan that protects you and your family from the unforeseen burden of an unpaid home loan in case of unexpected circumstances.
As the cost of living and financial uncertainties continue to rise, having a safety net around your home loan becomes a strategic necessity rather than a choice.
What is SBI RiNn Raksha?
SBI Life offers RiNn Raksha, a comprehensive Group Credit home loan insurance that protects you and your family from financial liabilities in unforeseen circumstances such as death or disability.
This plan ensures you repay the outstanding loan, relieves your family from the burden of loan repayments, and secures their future.
Key Features of SBI RiNn Raksha
1. Loan Coverage in Case of Death
- Death cover = Outstanding loan balance at the time of death.
- Loan balance decreases as per the amortization schedule.
- If the insured dies, the insurer pays the outstanding loan balance at the beginning of the month.
2. Option to Increase Loan Cover
- You can increase the loan cover to 120% of the original loan amount at the start of the policy.
3. Premium Payment by Financial Institution
- The financial institution may fund the premium by including the premium in the loan amount.
4. Moratorium Period
- A moratorium of 3 to 6 years is allowed.
- During this period, disbursements can be staggered.
- The cover amount can remain static or increase, depending on disbursements or interest due.
5. Flexible Loan Cover Terms
- Borrowers can choose loan cover terms as per their need.
- For loans of 15 years or more, the coverage must be at least two-thirds (2/3rd) of the loan term.
6. Choosing the Loan Amount for Coverage
- Borrowers can select a coverage amount equal to or less than the loan outstanding at the time of applying.
7. Coverage for Co-Borrowers
- You can cover up to two co-borrowers along with the primary borrower.
- Coverage options:
- Option 1: We insure the entire loan amount. If one borrower dies, we fully pay the loan, and the surviving borrower(s) receive the applicable surrender value.
- Option 2: We insure each borrower’s share of the loan. If a borrower dies, we pay off their share, and coverage continues for the remaining borrower(s).
- Option 1: We insure the entire loan amount. If one borrower dies, we fully pay the loan, and the surviving borrower(s) receive the applicable surrender value.
8. Premium Payment Options
- Flexible premium payment terms:
- Premiums can be paid as a single premium (SP).
- Or as level premiums (LP) payable for 5 or 10 years.
Additional Features
- Gold or Platinum options are available for covering loans with floating interest rates, at an extra cost.
- No Maturity Benefit: This plan does not provide a maturity benefit.
- Tax Benefits: Tax deductions are available as per prevailing norms under the Income Tax Act, 1961.
Calculate Your SBI Home Loan Insurance Premiums
SBI RiNn Raksha: Premium Payment Modes & Policy Terms
| Premium Payment Mode | Policy Term |
|---|---|
| Single Premium | 2 to 30 years |
| PPT 5 | 8 to 30 years |
| PPT 10 | 15 to 30 years |
SBI RiNn Raksha: Eligibility Criteria For Death Benefits
| Category | Minimum | Maximum |
|---|---|---|
| Age at entry (last birthday) | 16 years | 70 years |
| Maturity age (last birthday) | NA | 70 years |
| Group size during first year | 20 members | NA |
| Term | 2 years | 30 years |
| Sum Assured per member | Rs. 10,000 | NA |
Floating Interest Rate Options for SBI RiNn Raksha
SBI Life RiNn Raksha offers two options to cover loans with floating interest rates. Here’s an easy-to-understand breakdown of each option and the conditions that apply:
1. Gold Option:
- What’s Covered:
- If the borrower passes away, the amount payable will be the outstanding loan balance at the time of death.
- This amount is calculated based on the floating interest rate applied by the financial institution.
- The minimum payout will be based on the fixed interest rate determined at the start of the insurance cover
2. Platinum Option:
- What’s Covered:
- Similar to the Gold Option, the policy covers the outstanding loan balance at the time of death.
- The insurer calculates this based on the floating interest rate from the financial institution, but the payout will not be lower than the amount determined using the fixed interest rate at the start of the policy.
SBI RiNn Raksha: Suicide Exclusions
In the unfortunate event of suicide by the insured, whether sane or insane, within 12 months of the start or revival of the insurance cover, specific exclusions apply:
- No Sum Assured Payout: The sum assured benefit will not be payable.
- Refund of Premiums:
- 80% of the total premiums paid (excluding taxes and cess) till the date of death will be refunded to the policyholder or nominee.
- If a surrender value or interest is available as of the date of suicide, the higher of the two amounts will be refunded.
- Non-refundable Options: Premiums paid for options under the policy will not be refunded.
- This applies whether the suicide occurs within 12 months of the policy start or 12 months from policy revival.
Conclusion
SBI Life – RiNn Raksha serves as an essential plan that safeguards your loved ones from financial burdens in case of unforeseen events like death or disability. This comprehensive group credit life insurance covers various types of loans, including home, vehicle, and personal loans.
The plan ensures that you cover the outstanding loan amount, helping protect your family’s future by relieving them from the responsibility of loan repayments. With flexible premium options, coverage for co-borrowers, and tax benefits, this insurance plan offers you both financial security and peace of mind.
Frequently Asked Questions
The plan covers a wide range of loans, including home loans, vehicle loans, education loans, personal loans, and other loans.
Yes, you can cover up to two co-borrowers along with the primary borrower.
Both options cover the outstanding loan balance at the time of death. However, the Platinum option also considers floating interest rate changes, whereas the Gold option is based on the fixed interest rate.
If the borrower commits suicide within 12 months of policy commencement or revival, the insurer will refund 80% of the total premiums paid to your nominee, but will not pay the sum assured.
Yes, the insurer can change the premium rates for new members if there is a significant change in risk profile or market experience, with a 30-day notice to the master policyholder.
You can customize the loan cover term according to your needs, but for loans of 15 years or more, you must have coverage for at least two-thirds of the loan term.
Yes, existing borrowers can also opt for coverage of their outstanding loan under this plan.
The insurance coverage ends when you complete the loan term, even if interest rate fluctuations prevent you from fully repaying the loan.
HDFC Home Loan
SBI Home Loan
