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Credit life insurance for the vehicle is a type of life insurance plan that provides financial protection to your family in case you die while still repaying the car loan. It ensures the outstanding loan is fully repaid, protecting your family from the burden of repaying the debt.
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This insurance is usually offered when you take a car loan and is an affordable way to give your family financial peace of mind.
Term Plans
Credit life insurance is a type of insurance that pays off the remaining loan on a car or bike if the borrower passes away during the loan term. It protects the borrower's family financially by ensuring they are not burdened with repaying the vehicle loan. This coverage is usually affordable and is designed to secure the financial future of the policyholder's loved ones.
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Credit life insurance for vehicles covers the unpaid loan amount if the borrower dies before fully repaying the vehicle loan. This life insurance pays the remaining loan directly to the lender, so the borrower's family doesn't have to worry about the debt. Let us see how credit life insurance works with the help of an example:
Karan buys a car and takes a loan of Rs. 8 Lakhs to pay for it. He also opts for a credit life insurance policy when buying the car. Over the next few years, Karan regularly paid his EMIs, and the outstanding loan decreased.
Unfortunately, after 3 years, Karan passed away due to an illness. At this time, his remaining loan balance is Rs. 3 Lakhs. Since Karan had credit life insurance, the insurance company pays the remaining Rs. 3 Lakhs to the lender. This way, Karan's family doesn't have to worry about repaying the loan and can keep the car without financial stress.
Let us take a look at the benefits of buying credit life insurance for vehicles:
Low Premiums: Credit life insurance offers coverage against large sums of loans at affordable premiums. However, like term insurance plans, the premiums may increase with age.
Secure Family from Loan: With credit life insurance, you can secure your family financially from having to bear the burden of your remaining loans in your absence.
Stress-free Life: Credit life insurance allows you to live a stress-free life by giving your family the financial security they need against your outstanding debts.
Easy Claim Settlement: In case of an eventuality, your family can easily reach out to the insurer and submit the required documents to claim a quick and easy claim settlement.
Tax Benefits: You can claim term insurance tax benefits as per the prevailing tax laws of the Income Tax Act 1961.
Note: The term plan premium should be calculated using Policybazaar's online term policy calculator before buying.
Selecting the right credit life insurance plan for your vehicle is important to ensure sufficient coverage and peace of mind. Here is a list of some key factors:
Loan cover amount: Always ensure that the plan covers the full amount of the loan and decreases along with the repayment of your loan over time. The insurance should provide coverage for the remaining balance in case of the policyholder's death.
Affordable premium: Compare premium quotes from different insurance companies. Choose a policy that offers affordable premiums without draining your wallet.
Policy T&Cs: Review the plan's terms and conditions carefully. Some plans may have exclusions, such as existing conditions, affecting the claim process or plan eligibility.
Policy term: The Policy term should always align with the loan term. Generally, the life coverage should last as long as the loan repayment period to avoid gaps.
Claim process: Choose an insurance company with a fast claim process. Always ensure that your beneficiaries or family can claim the benefit easily and without any complications.
Add-ons: Check for additional riders, such as accidental death or critical illness coverage, that could offer financial security in the future.
Credit life insurance for vehicles is an important type of insurance that offers security to the loan owner's family in the event of their untimely demise. You can consider buying this type of insurance if you have outstanding car or bike loans.
Note: You should also check the benefits of term life insurance if you plan to purchase the term insurance plan.
˜Top 5 plans based on annualized premium for bookings made on https://www.policybazaar.com in the first 6 months of FY 24-25.
Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
+Rs. 487/month (Rs.16/day) is starting price for a 1 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 38 years of age.
Prices offered by the insurer are as per the approved insurance plans | #All savings and online discounts are provided by insurers as per IRDAI approved insurance plans | Standard Terms and Conditions Apply | **Tax Benefits are subject to changes in tax laws.| Policybazaar Insurance Brokers Private Limited
We will respond in the first instance within 30 minutes of the customers contacting us. 30-minute claim support service is for the purpose of giving reasonable assistance to the policyholder in pursuance of the claim. Settlement of claim (including cashless claim) is the responsibility of the insurer as per policy terms and conditions. The 30-minute claim support is subject to our operations not being impacted by a system failure or force majeure event or for reasons beyond our control. For further details, 24x7 Claims Support Helpline can be reached out at 1800-258-5881
For more details on risk factors, terms and conditions, please read the sales brochure carefully before concluding a sale
Policybazaar Insurance Brokers Private Limited | CIN: U74999HR2014PTC053454 | Registered Office - Plot No.119, Sector - 44, Gurgaon, Haryana – 122001 | Registration No. 742, Valid till 09/06/2027, License category- Composite Broker Visitors are hereby informed that their information submitted on the website may be shared with insurers. Product information is authentic and solely based on the information received from the insurers.
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+Rs. 820/month is starting price for a 2 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 38 years of age.
+Rs. 1,443/month is starting price for a 5 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 38 years of age.
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