SBI Life RiNn Raksha

Key Features of the SBI Life - RiNn Raksha

Here are the key features offered by this credit life insurance plan:

• The plan covers the outstanding loan amount in case of the borrower’s death, as per the loan’s amortization schedule and agreed interest rate.

• The premium can be added to the loan amount, so borrowers don’t have to make a separate payment.

• A moratorium period of 3 months to 6 years is available, during which disbursements can be staggered and the cover may stay constant or increase depending on interest payment terms.

• Borrowers can choose the loan cover term as per their need, with a minimum of two-thirds of the total loan tenure for loans of 15 years or more.

• Existing borrowers of the financial institution can also be covered for their remaining loan period.

• The plan allows coverage for up to two co-borrowers along with the primary borrower, with the option to insure each for the full loan amount or for their respective share.

• Premiums can be paid as a single payment or as regular payments for 5 or 10 years, with the choice of yearly, half-yearly, quarterly, or monthly modes.

• Borrowers can also choose Gold or Platinum options for additional protection against changes in floating interest rates.

• The plan does not offer any maturity or survival benefit.

• Premiums paid under this plan may be eligible for tax benefits as per prevailing income tax laws.

Eligibility Conditions for the SBI Life - RiNn Raksha Plan

Here are the eligibility conditions for SBI Life RiNn Raksha credit life insurance plan:

The minimum death benefit will be at least 105% of the total premiums paid up till the date of death.

Floating Interest Rate Options Under SBI Life RiNn Raksha

This plan offers flexibility to manage loans with floating interest rates through two special options, Gold and Platinum. These options ensure that the sum assured remains aligned with the changing loan balance caused by fluctuating interest rates.

• Gold Option:
  Under this option, the benefit amount payable in case of the borrower’s death is equal to the loan outstanding at that time, calculated based on the floating interest rate offered by the lending institution.

• Platinum Option:
  This option provides added security by ensuring that the benefit amount payable in case of death is based on the floating interest rate, but never less than the outstanding loan amount calculated at the fixed interest rate decided at the start of the policy.

General Conditions for the Options

• When the interest rate changes, the payable amount will be recalculated as per the chosen option. The loan outstanding will be estimated by keeping the EMI the same as at inception, and the repayment schedule will be revised based on the new interest rate. However, if at any time the loan interest exceeds the EMI, the payable amount on death will remain at the same level as in the previous period.

• These options are available only if the cover term is five years or more.

• Fluctuations of up to ±600 basis points from the original fixed interest rate will be considered while calculating the benefit.

• Any increase in the loan outstanding due to EMI defaults will not be covered.

• The cover will end at the completion of the policy term decided at inception, even if the loan remains unpaid due to interest rate fluctuations.

• If loan repayment is not on a monthly basis, the same methodology will apply for other payment frequencies.

• A complete history of interest rates during the loan period will be required at the time of claim.

General Policy Details of the SBI Life - RiNn Raksha

• Flexibility of Options: The Master Policyholder, acting as the group administrator, selects the product features for the plan. Only the chosen features will be available to eligible group members, who can then select from these options as permitted by the Master Policyholder.

• Grace Period: A grace period of 15 days (for monthly premiums) and 30 days (for other modes) is allowed. The member policy remains active during this period. If the premium is not paid within the grace period, the policy will lapse.

• Premium Payments: If the insured member has paid the premium to the Master Policyholder but it has not been remitted to the insurer, and a valid claim arises, the insurer will still honour the claim. The claim will be processed after verifying proof of payment and receipt of the pending premium from the Master Policyholder.

• Nomination: The Master Policyholder must collect nominations from members as per Section 39 of the Insurance Act, 1938, as amended from time to time.

• Claims: Members can authorise the Master Policyholder to receive claim proceeds. In such cases, the insurer will pay the outstanding loan balance to the Master Policyholder and any remaining amount to the nominee or beneficiary. If no such authorisation is given, the full claim amount will be paid directly to the nominee or beneficiary. This arrangement applies only if the Master Policyholder is a regulated lending institution (as per RBI, NHB, or other approved authorities).

• Assignment: Assignment of the policy will be governed by Section 38 of the Insurance Act, 1938, as amended.

• Lapse and Revival: For regular premium (LP) policies, if premiums are not paid within the grace period, the policy will lapse. It can be revived within 5 years from the date of the first unpaid premium, subject to applicable rules.

• Paid-up Value: After the first year’s premium is paid, the policy acquires a paid-up value. In the event of the insured’s death, a reduced sum assured will be payable. Paid-up policies can also be surrendered.

• Surrender Value: Available anytime after payment of the first year’s premium. The surrender value is calculated as:
  Surrender Value = 50% × Premium(s) Paid × (Unexpired Term ÷ Total Term)>

• Free-look Period: A 30-day free-look period is available from the date of receiving the Master Policy Document or Certificate of Insurance. If the policyholder or member disagrees with the terms and has not made a claim, they can cancel the policy and receive a refund of the premium paid after deducting proportionate risk premium, stamp duty, and medical expenses (if any).

• Pre-closure of Loan: In case of early loan repayment, the member may surrender the cover and receive the surrender benefit, if any, or continue the cover for the remaining policy term.

• Cancellation of Loan: If the loan is cancelled or not taken up within 90 days from the issuance of the Certificate of Insurance, the member can cancel the cover. Upon submission of the COI, 90% of the premium paid (excluding taxes and cess) will be refunded after deducting stamp duty expenses.

• Termination of Insurance Cover: The insurance cover will automatically end on the earliest of the following:

  • The date the member requests to end the cover.

  • The end of the policy term.

  • The death of the insured member.

  • The date of free-look cancellation.

  • The date when surrender value (if any) is paid.

  • The end of the grace period, if due premiums remain unpaid and no paid-up value exists.

  • The date when the member reaches the maximum cover cessation age.

  • If all co-borrowers are covered for the full loan amount and the death benefit is paid on one borrower’s death, the cover for surviving co-borrowers will cease, and any applicable surrender value will be paid.

• Termination of Master Policy: If the Master Policy is terminated, life cover for existing members will continue until the end of their individual policy term, provided all due premiums are paid or until surrendered.

Suicide Exclusions 

In the event of the sucidal death of the life assured within 12 months from the date of commencement of risk of the member, the nominee will receive 80% of the total premiums paid till the date of death, given that the policy is still in force. 

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