What is it?
Insurance premium Finance is a specially designed facility that aims at assisting our customers with paying annual insurance premiums. The facility enables our customers (both retail and corporate clients) to pay their insurance premiums in instalments rather than in one lump sum amount.
How does it work?
The Bank pays insurance premiums to the insurance company on behalf of the customer and grants a loan to the customer which is repaid in monthly instalments.
What are key features of the product?
- The loan is payable in monthly instalments with the first instalment due at the inception of the policy.
- The product has a maximum tenor of 10 months and minimum of 8 months.
- The product covers premiums for commercial, auto, plant and machinery and other major insurance covers.
What is the benefit to the customer?
- The facility has a low interest rate
- The product allows the customer to spread the cost of insurance over the term of the loan.
- Insurance Premium Finance smoothens business cash flow by allowing payment of premiums in monthly affordable instalments.
- The security for the loan is the policy itself and its proceeds – No other security is required.
Effective interest rate varies from 10% to 16.5% per annum depending on the tenor of the loan chosen and the prevailing reference rate.