- This topic has 6 replies, 6 voices, and was last updated 1 year, 3 months ago by
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KRecently visited a SBI loan centre where most of the home loan documentation happens.
As I was waiting, I found insurance sales people sitting at the branch calling up people and telling them1) A term life insurance policy is required to get their home loan approved.
2) Thereafter, they told the customers that an X amount of premium has to be paid, it has to be paid upfront
3) A call will be made from the SBI life insurance team asking for existing illnesses and smoking/drinking habits to which they MUST say they have no pre-existing conditions(PEDs) and no vices for the process to proceed smoothly without harassment
As per my knowledge, point 1 is not true. So, when they tried to sell me the same BS I rightaway asked them to fuck off, they understood, and fucked off.
But the issue is, almost all the other customers there, most of whom are ignorant of the regulations agreed to take the term policy and obliged with points 2 and 3 upon intimidation tactics(loan won’t get approved) and bs financial advice(paying up front will get you 5% discount) and all fed by the sales agents.
But my bigger concern is point 3, even after taking the term life insurance and paying a one-time premium, these people are being asked to hide PEDs and withhold critical declarations. If something happens to these people from PEDs next year, and the term life insurance is needed, their claims would most likely be rejected on grounds of non-disclosure. There won’t be any legal respite also SBI life will claim the customer lied in declarations.
The insurance premium money is essentially being stolen from the customers.
This seems to be a clear case of business malpractice. I want to know if there is any legal way to counter this.
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KYes, property insurance is also not mandatory but they will effectively not give you the loan without it. All the banks have started doing it, so there isn’t much option too. But while property insurance is still a lesser amount, the term insurance is a definitely a robbery, premiums are usually a couple of lakhs.
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FI was also the one who took insurance, though I am very well aware of the bullsh*t.
I considered the most important thing. If life suddenly vanishes from me, my homeloan is immediately paid off. Also, whatever extra premium I paid, that will be returned by SBI.
If you are wondering, I paid around 60K premium for 82L loan. Not a lot, but it’s my first time dealing with a large collateral, and I can’t burden my dependents with my sh*t. And I am not advising people to buy their insurance.
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