Group Credit Life Insurance

bnl offers this product to Banks as a solution to protect their loan liabilities. This is an annually renewable product which offers protection cove against each Individual Loan Account Member (Bank Client) so that in the untimely demise of an Individual during the Policy Period, an amount equal to the outstanding amount on the Bank record at the date of the event, will be paid out by the Insurer.

The usual Cover is for Loans granted on Individuals up to a predetermined maximum amount and duration, for instance 10 years or 20 years and up to age 70 if sooner. There is usually a free cover limit meaning that every Individual will have automatic acceptance for the insurance cover based on having qualified for the Loan and the Loan amount is equal or less than the agreed free cover limit, for instance BD 60,000 per Individual. Free cover means medical reports are not required and medical information does not need to be declared. The insurance premiums are low and the Scheme is very easy for administration with the attraction of peace of mind for capital protection of the Stakeholders.

 
Termination:
  • At maturity date, or…
  • Once full repayment has been made on the Client’s loan or…
  • In an instance where the insurance premium remains unpaid for more than 30 days, or…
  • Cancellation of the Credit Agreement has taken place.
 
Required information for member enrolment:
  • Monthly outstanding Loan balance.
  • Number of Members covered each monthly declaration date.
  • Loan Agreement records and Statement to be maintained.
 
Cover selection available:
  • Personal loans.
  • Overdraft.
  • Credit cards.
  • Mortgage loans.
 
Claim requirements:
  • Notice of Claim (Letter).
  • CPR.
  • Form (to be stipulated).
  • Proof of loss within 90 days of the event (Death Certificate plus cause of death).
  • Statement of Loan Account.
  • Agreement between Bank and Client.
 
Example of a Scheme in Operation

Say 20,000 Borrowers for loans with a maximum of BD 60,000 each

Option 1 Self Insured:

2 Claims in a month could amount to a liability of BD 120,000 for the Stakeholder.

Options 2 Fully Insured:

See the example below which indicates an approximate monthly rate.

Assuming 2 deaths in a month.

Month

Total Outstanding BD

No of Borrowers

Rate

Premium BD

Jul 2012

287,033,211.822

12,000

0.150

43,054.982

Aug 2012

289,959,737.416

12,500

0.150

43,493.961

Sept 2012

292,375,620.042

13,000

0.150

43,856.343

Oct 2012

296,414,069.711

13,500

0.150

44,462.110

Nov 2012

298,312,193.136

14,000

0.150

44,746.829

Total Premium

219,614.225

 
DOCUMENTARY EVIDENCE REQUIRED TO PROCEED WITH APPLICATION