SBI to discontinue free accident cover for loan customers

NEW DELHI: Country's largest bank SBI will discontinue a free accident insurance cover given to its home and car loan customers from July this year.

In a notification to its customers, the State Bank of India (SBI) said the complimentary group personal accident insurance cover (death only) for home and car loan customers will be discontinued on the expiry of current Master Policy on July 1, 2013.

"Hence, in case of accidental death of any Home/Car loan borrower on or before July 1, 2013, claims may be lodged for the outstanding amount in the loan account subject to the terms and conditions mentioned in Master Policy," SBI said.

The bank, however, did not mention the reasons for scrapping the complimentary cover.

SBI said that its home and car loan borrowers, who do not have any insurance cover for their loan liabilities, may opt for the policies being offered by SBI's insurance venture.

Currently, SBI General Insurance Company Limited is offering an Accident Insurance cover of Rs 4 lakh for SBI's savings bank account holders for an annual premium of Rs 100.

Earlier this year, SBI had said it provided personal accident cover to over 7 million of its account holders across the country in association with SBI General Insurance.

SBI General Insurance Company is a joint venture between the State Bank of India and Australia's leading general insurance provider Insurance Australia Group ( IAG).