The Hindu Business Line : IOB offers cover for home, retail loans

Indian Overseas Bank offers `liability insurance' cover, as a value addition on home loans and other retail loans as well. The effort is aimed at insulating the dependents from any unexpected contingency.

Bank sources say that the premium rates are reasonable. The borrower has the flexibility of opting to load the premium on to the loan amount, which is recovered by the bank over the loan duration as a part of the EMI or pay it separately. Tax benefit under the Income-Tax Act can be claimed on the premium paid.

In its bid to create awareness for this product, the Idigarai branch of the bank had organised a small function for settling the first claim under `liability insurance'.

A home loan borrower of Idigarai branch breathed his last at Chandigarh during an official visit in July. He had sought finance support to the tune of Rs 2 lakh in April. The branch claimed the liability insurance of Rs 2.15 lakh, which was settled by the insurance company.

`The widow of the deceased was relieved off the liability. We handed over the mortgaged documents to her,' said Mr T. Thenappan, Chief Regional Manager of the bank. He called upon the borrowers to come forward and voluntarily opt for this cover.

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