The SBI Life Insurance Company today launched a single premium, reducing term assurance plan under the group scheme.
State Bank of India (SBI) chairman, Janki Ballabh said: "This is the cheapest cover available in the market today."
The product will initially be offered to SBI home loan customers and thereafter also be sold as a group product to other housing finance companies.
Home loan customers will have the option of taking a housing loan with a life insurance cover attached, and the cost of this cover will be in-built into the equated monthly installments if desired by the customer.
"We are cheaper than the industry by 20-25 per cent," said Ballabh. For a 35-year-old customer, SBI Life's single premium reducing term plan will cost him a one-time premium of Rs 23,180 for a Rs 10-lakh loan to be repaid in 15 years.
HDFC Standard Life, for instance, offers a 35-year old a similar cover for a one-time premium cost of Rs 26,150, said sources.
Incidentally, according to company sources, Metlife Insurance Company's product -- MET Mortgage Protector SP -- works out cheaper, where a 32-year-old individual would pay Rs 17,003 yearly on a Rs 10-lakh housing loan over a period of 15 years.
SBI Life, a joint venture with Cardif of France, has garnered a premium income of Rs 45 crore through group and individual policies issued during the fiscal till August 31, said the company's managing director R Krishnamurthy.
SBI Life has covered 55,400 lives under group and individual policies, amounting to 4,100 during the same period.
SBI Life also launched Sudarshan -- an endowment plan -- today, which provides dual benefit of insurance cover and savings for individuals. This brings the total number of products launched to 10 since SBI Life commenced operations last June.
SBI Life is banking on the bancassurance platform to further push sales especially to those in the rural segment where there has been little penetration of insurance products.
Krishnamurthy said: "More than 80 per cent of policies sold have been in the rural areas in the last six months".
