SBI ends free accident insurance perk on home, car loans

The State Bank of India (SBI), the country's largest lender, today said will discontinue the free accident insurance cover given to its home and car loan customers from July this year.

In a notification to its customers, the bank 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 1 July 2013.

It did not mention the reasons for scrapping the complimentary cover.

"In case of accidental death of any home / car loan borrower on or before 1 July 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 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.

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 Co Ltd.

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

Currently, SBI General Insurance is offering an accident Insurance cover of Rs4 lakh for SBI's savings bank account holders for an annual premium of Rs100.