Housing loan insurance coverage? my big problem pls. help?

Question

My brother in law taken a joint housing loan in a nationalized bank during 2005. The bank has debited Rs.1,06,000/- in his loan account for insurance premium during Feb'05. My sister and brother in law both of them gone through the medical checkup process too. Unfortunately my brother in law passed away in Apr'06. My sister became liable for all the liabilities. Recently we have received a surfacee notice from bank to settle the loan with interest. When we enquired about the insurance cover which we have taken for that loan, the bank has replied the insurance got rejected and the amount was recredited to his account during Dec'05. My question is how come the insurance got rejected and for what reason after indefinite delay? We did not receive any written communication from bank for the same and still they are not providing. The subsidiery company of the bank only taken the insurance premium. Confirm the posssibilities of winning if we fight legally against this case?

Answer 1

Best Answer - Chosen by Voters

First take the rejection letter photocopy from the bank > go to insurance company which has rejected your proposal > take information, why they have rejected > than only you can start your action.

Answer 2

homeinsurance.awardspace.us - try this one. Got my home insurance from them. As I know they provide such a service.

Answer 3

Normally banks or Financial Institutions which extend housig loans take insurance coverage with Life Insurance companies or General Insurance (non-life) companies. These banks have a tie-up agreement with the insurance companies, that every borrower is covered under Life Insurance policy or General Insurance policy. While LI covers death due to disease/natural death/accident, the GI (normally personal accident) policies covers only accidental deaths. You say that the premium was debited from your brother's account but the insurance was rejected by the insurance company and the premium was credited back to the account. I feel that perhaps the bank, after debiting the premium from your bro's account, ignored to send the premium to the insurance company. This could be one of the reasons why the insurance coverage was not effected. The other is, your brother might not found to be fit for issue of insurance as per terms and conditions of the insurance company. Normally persons with disability or persons with diseases could be denied insurance coverage. You can contact the Bank that provided housing loan to your brother and demand in writing for the reasons for denial of insurance coverage and also other reasons. You can demand for the details of the insurance company and enquire them about the denial. If they fail, you can contact the grievance departments or Ombudsman of the banks. If they do not provide information you demand, you can ask for the same under Right to Information Act.

Source(s):

Self