At present, Insurance Industry states that almost 30 percent of personal loan borrowers are buying insurance covers to pay back their loans. This tendency is mostly seen in case of home loans which accumulates around 90 percent of it; those who range between 10 lakh to 1 crore.

A personal loan is usually of the period of three-five years and consists of a low rate premium. Even in case the borrower purchases a group insurance policy, the premium is cheaper. “At a small cost both banks and borrowers are assured of peace of mind,” said a head of a Public Sector Bank.

Group mortgage are short duration loans and are mostly single-premium covers, especially for personal loans. A.S. Narayanan, Chief Distribution Officer at Bajaj Allianz Life Insurance said, “Group mortgage covers are fast gaining ground. A lot of people are buying covers for personal and overdraft to avoid burdening their families in the event of their death.”