Central bank Offers Reverse Mortgage Loan Product with Life-Time Annuity

By | December 17, 2009

Central bank of India has entered into an agreement with Star Union Dai-ichi Life Insurance to launch a scheme that assures life-time annuity for senior citizens opting for a reverse mortgage loan from the bank.

“The product, named “CENT Swabhiman Plus”, is an improvement to the existing product CENT Swabhiman,” said Mr S. Sridhar, Chairman and Managing Director, Central Bank of India, at the launch function in New Delhi. One of the improvements in the new scheme is that a senior citizen can avail himself of lifetime payment as against the maximum of 20 years in the existing reverse mortgage loans offered by various commercial banks.

Speaking to a leading business magazine, Mr M. Balachandran, Chairman of Star Union Dai-chi Life Insurance said that since a life insurer been roped into the product, the bank will be able to offer higher monthly payments to senior citizens. The life insurance company will be in a better position to assess life risk and provide better terms through annuities, he said.

Mr G.C. Chaturvedi, Additional Secretary in the Finance Ministry, mentioned that reverse mortgage loan products had not clicked in India after their launch in 2007 and expressed hope that efforts would be made by Central Bank to increase awareness about the new offering.

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About Pradeep Yuvaraj

Pradeep Yuvaraj is a Co-Founder and Director at Finerva Financial Solutions Private Limited, a financial education company focused on personal finance education. He has penned over 250 articles relating to Personal Finance and clocked over 500 hours of educating individuals on managing personal finance. He is a serial entrepreneur and has been associated with 7 Start-ups. His entrepreneurial experience spans industries as varied as Education, Gas Engineering, Automobile Design, Software development and more recently a Pure play presentation design company. Prior to turning entrepreneur in 2005, he has worked for 3 of the top ten companies of the world - Shell, ExxonMobil and Total SA. This experience included handling Branch Operations, Channel Sales and Business Development across 5 states over a period of 8 years. He holds an MBA from Symbiosis and an Electronics Engineering Degree from the University of Pune.

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