Loan Protector Clause Samples
The Loan Protector clause is designed to safeguard the lender’s interests in the event that the borrower fails to maintain required insurance coverage on collateral securing a loan. In practice, this clause allows the lender to obtain and pay for insurance coverage on the collateral if the borrower neglects to do so, with the cost typically added to the borrower’s loan balance. Its core function is to ensure that the lender’s security interest remains protected against loss or damage, thereby mitigating the risk of uninsured losses that could compromise loan repayment.
Loan Protector. If an Insured Person suffers an Injury due to an Accident that occurs whilst on Trip during the Period of Insurance, We will pay an amount equal to the Insured Person’s outstanding principal amount of Loan, subject to this amount not exceeding the amount specified in the Policy Schedule/Certificate of Insurance. This Cover Benefit will be payable provided that:
a. We have accepted a claim under Personal Accident (Accidental Death/ Permanent Total Disability) or Personal Accident (Common Carrier) in respect of that Insured Person;
b. The amount payable under this Cover Benefit will be in addition to the amount payable under Personal Accident (Accidental Death/ Permanent Total Disability) or Personal Accident (Common Carrier) or any other applicable Cover Benefits;
c. Any payments that are overdue and unpaid by the Insured Person prior to the occurrence of the event giving rise to a claim under this Cover Benefit will not be considered for the purpose of this Policy and shall be deemed as paid by the Insured Person Loan: Loan means the sum of money lent at an interest or otherwise to the Insured Person by any bank/financial institution as identified by the Loan Account Number specified in the Policy Schedule/ Certificate of Insurance or certified in writing and provided to Us by the bank/financial institution.
Loan Protector. If an Insured Person suffers an Injury due to an Accident that occurs during the Coverage Period, We will pay an amount equal to the Insured Person’s outstanding principal amount of Loan, subject to this amount not exceeding the amount specified in the Certificate of Insurance. This Cover Benefit will be payable provided that:
a. We have accepted a claim under the in-built Benefit 1.3 (Accidental Death Benefit) or Cover Benefit
1. I (Permanent Total Disability) in respect of that Insured Person;
b. The amount payable under this Cover Benefit will be in addition to the amount payable under the in-built Benefit 1.3 (Accidental Death Benefit) or any other applicable Cover Benefits;
c. Any payments that are overdue and unpaid by the Insured Person prior to the occurrence of the event giving rise to a claim under this Cover Benefit will not be considered for the purpose of this Policy and shall be deemed as paid by the Insured Person.
Loan Protector. Subject to the Company accepting its liability against a claim under section 2.1 of this Policy and in consideration of additional premium received from the Policy holder/Insured Person at the time of issuance of the Policy, it is hereby understood & agreed that the Company shall, in addition to the Sum Insured for the insured person also pay any one of the following two amounts whichever is lesser:
1. The principle outstanding amount of the insured person in case of only one insured person being covered or 50% of the principle outstanding amount in case of two insured persons being covered under the Certificate of Insurance.