Insurance claim on death of guarantor
5 years ago
X has taken loan(given signed cheques) with Y as guarantor to the loan(Y given his property as surity).X paid some part of loan.Later X stopped paying.Y died now.Can insurance be claimed now?
In general, in these type of loans. Who will be covered under insurance? Borrower? Guarantor? Or both?
It all depends terms of the insurance policy, one must go through the terms therein and generally the borrower has the right to claim such insurance.
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Rameshwar Dadhe
Responded 5 years ago
If the Principal Debtor defaults on the loan, the debt becomes the Guarantor's responsibility, and it could mean the Guarantor may have to sell their own home to service or clear it. In the event a Guarantor dies during the term of the guarantee, the debts do not die too.
Factors to consider before signing a guarantee It is advisable to consult your lawyer so that your rights and liabilities can be properly explained to you. Each guarantee is different and turns on the clauses set out in the agreement. Therefore, it is imperative.
Shanti Ranjan Behera
Advocate
Sandheep J
Replied 5 years ago
Sir. As Guarantor has responsibility in clearing the debt. Isnt it mandatory to insure the guarantor too? Also the loan agreement is between borrower,guarantor and the lender.
Shanti Ranjan Behera
Replied 5 years ago
Dear Client,
I am here to obey the law and not to make the law.
There are different machinery to make the law for the country.
Better approach them.
Shanti Ranjan Behera
Advocate
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