Educational Loans To Get Insurance Cover

Hyderabad: Banks are now trying to push their educational loan products with insurance cover to make them more attractive for the customers and safer for themselves. According to Mr A.L. Nageshwar Rao, General Manager, Andhra Bank, as educational loans have a long re-payment schedule often stretching up to nine years, the liability insurance shields the risk. In the event of any tragedy (death or incapacity), the loan repayment will be taken care of by the insurer.

Andhra Bank''s educational loan portfolio had grown by 34.7 per cent to Rs 953 crore in the first quarter of the current fiscal compared to Rs 707 crore in the same period last year. The bank has a tie-up with Life Insurance Corporation for the purpose.Though dependent on the loan amount and repayment schedule, the average premium amount works out to a little over Rs 1,000 per lakh per annum. While insurance is still an option for the customers in PSU Banks, many private banks are ''literally forcing'' the insurance on the customers, according to an official of a private bank.