If premium is missed, none can force insurer to pay claim

had taken an education loan of ` 3 lakh in 2010 from Bank of India. Last month, the outstanding amount was around ` 4.05 lakh after reducing some subsidy given by the government. I have completed my degree and am working as a software engineer in a start- up firm. My salary is ` 14,000 per month. I can start repaying ` 5,000 per month to the bank. Should I start repaying now? Or should I wait for my salary to reach the tax bracket? Is there any possibility that I could get my entire interest waived off?

Snigdha Hyderabad The repayment for an education loan starts after the moratorium period, which means the course period and one year, or six months, after getting a job, whichever is earlier.

During the moratorium period, the bank calculates interest on your loan on simple interest. Interest is calculated as and when the loan amount is disbursed and not on the entire loan amount. If the student does not service the interest portion during the moratorium, the bank adds the interest portion to their principal amount, which results in increase in EMI.

Bank of India offers a concession of one per cent to students who service their loan during the moratorium period and this is taken into consideration while paying the actual EMI.

Hence, if you service the loan during the moratorium period, the bank will offer you the interest concession plus you will get the benefit of lower equated monthly instalment ( EMI) when the actual repayment begins.

Please remember that no lender will offer you any kind of loan without making any money on it in the first place. So there is no point in searching for a lender who will offer you an interest- free loan.

has rejected the death claim over my mother’s Jeevan Saral policy. It says the policy had lapsed because of non- payment of the last premium.

The premium was deducted on monthly basis through ECS from my mother’s account. On the due date of premium deduction, the ECS mandate was presented before 2 pm and money was deposited after 2 pm in the account, so the ECS mandate was dishonoured.

So LIC rejected the claim by saying that premium was not deducted due to insufficient balance in the account. My mother was not informed in time about the ECS mandate dishonourment. Otherwise she would have paid the premium by cash. I took the matter to the insurance ombudsman, but got no relief there too. Gopal Yadav

Kurnool

It will be tough for you to get any relief on legal grounds. As you knew that you had deposited the money after the clearing timing, first of all, it was your responsibility to check whether the premium is debited to your account or not. You have to keep sufficient bank balance on the date of direct debit of the insurance premium in advance.

So, in case of dishonour of ECS, you should pay the premium at least during the grace period of 15 days by way of cash or cheque or DD. Since you failed to pay the instalment premium, your mother’s policy lapsed.

It will not be right to shift the blame on the insurance company about not informing about the dishonour of the ECS.

You could have revived your mother’s policy, since it had lapsed.

Depositing money in your bank account does not serve the purpose; the premium should have been paid on time within the grace period. So, the insurance company is right in rejecting the claim. Still the nominee in the policy will be get the paid- up value of the policy, if you have paid for at least three years.