I am having a housing loan in Andhra Bank with 9.45 per cent. At the time of issuing loan, the bank had applied for insurance with premium of Rs 1 lakh which was debited in the housing loan itself. My question is: when I transfer the loan to any other lender who is offering little bit lower rate of interest, can I transfer the insurance policy too? If not, whether can I get refund of insurance premium?
Ans: No, you can’t transfer the existing insurance policy. You can examine the terms of the policy to see whether it continues on prepayment of the loan. If it does than you can have the lenders lien removed from the policy and request the insurance company to mark the lien of the new lender.
In case the policy is not continued check if there is any surrender value payable to you.