Top 7 Loan Protection Insurance Providers for NBFCs in India (2025)
- Naval Goel
- Jun 23
- 3 min read
Introduction for Loan Protection Insurance
In 2025, with rising NPAs and increased credit penetration in Tier II & III markets, loan protection insurance is no longer a luxury — it’s a necessity for NBFCs. These policies not only reduce risk exposure but also unlock new revenue streams through protection-linked lending.
In this blog, we spotlight the Top 7 Loan Protection Insurance Providers in India who are helping NBFCs scale safely, digitally, and profitably.
Table of Contents
1. Xurance
Tagline: Protecting India's Lending Backbone
Why Xurance?Xurance is a digital-first insurtech built for NBFCs, HFCs, and MFIs. It provides end-to-end loan protection insurance embedded directly into the disbursement journey.
Key Features:
Custom plans for business, personal, or secured loans
Single-click policy issuance
API integration with LMS/core banking
Recurring revenue for lenders
Covers death, disability, job loss, and critical illness
Ideal For: NBFCs, MFIs, Fintech lenders👉 Explore Xurance
2. HDFC Life
Tagline: Sar Utha Ke Jiyo
Why HDFC Life?A trusted name for decades, HDFC Life offers Group Credit Protect plans suited for NBFCs with large-scale retail or microfinance portfolios.
Key Features:
Covers death, disability, terminal illness
Multiple rider options
Flexible premium payment modes
Ideal For: Large NBFCs, banks with co-lending models
3. ICICI Prudential Life
Tagline: Zimmedari ka Humsafar
Why ICICI Pru?Their Group Loan Protect plans offer custom protection for term loans and credit card debt. Known for strong claim settlement and tech adoption.
Key Features:
Coverage up to ₹50 crore
Premium funding options
Fast underwriting and digital onboarding
Ideal For: NBFCs with retail, gold, or home loans
4. Tata AIA Life
Tagline: Raksha Ka Naya Nazariya
Why Tata AIA?Tata AIA’s Group Loan Secure policy helps NBFCs cover borrower liabilities efficiently while maintaining a quick issuance turnaround.
Key Features:
Death, CI, PTD cover
Optional joint-life cover
Pre-underwritten products for speed
Ideal For: Consumer finance NBFCs, housing loan providers
5. SBI Life
Tagline: With Us, You're Sure
Why SBI Life?Their Group Credit Life Insurance solution is perfect for NBFCs serving semi-urban and rural borrowers with flexible terms.
Key Features:
Coverage on reducing or level sum assured
Affordable group premiums
SBI trust and reach
Ideal For: MSME lenders, regional NBFCs
6. Aditya Birla Sun Life
Tagline: Jeevan Bhi, Business Bhi
Why ABSLI?Offers group term plans designed for credit-linked borrowers. Customizations and pricing are highly favorable for large loan portfolios.
Key Features:
Built-in critical illness rider
Digital document upload
Employer-employee and borrower group plans
Ideal For: NBFCs with structured borrower categories
7. Bajaj Allianz Life
Tagline: Insurance se Badho Life Mein Aage
Why Bajaj Allianz?Known for flexible group life offerings for lenders and microfinance players. Highly adaptive to co-branded offerings with fintech NBFCs.
Key Features:
Renewable 1–5 year terms
EMI protection cover
Post-death support benefits
Ideal For: Fintech lenders, urban-centric NBFCs
Comparison Table
Provider | Claim Ratio | API Support | Riders Available | Ideal NBFC Type |
Xurance | 98.7% | Yes | All major riders | Digital-first, MFIs, HFCs |
HDFC Life | 99.4% | Yes | 3+ | Large NBFCs, banks |
ICICI Prudential | 98.1% | Yes | 4+ | Home loan lenders |
Tata AIA | 99.01% | Partial | 3+ | Consumer finance |
SBI Life | 98.5% | No | Basic | Rural NBFCs |
Aditya Birla Life | 97.9% | Yes | Yes | Structured portfolios |
Bajaj Allianz Life | 98.3% | Partial | Yes | Urban, fintech lenders |
Why Loan Protection is Critical for NBFCs in 2025
"Loan protection insurance is not just a risk solution — it’s an enabler for sustainable credit growth."— Nandan Kumar, NBFC Risk Advisor
Increased borrower risk due to volatile incomes, rising healthcare expenses, and sudden job losses means NBFCs can’t afford to lend unprotected. Loan insurance:
Reduces delinquency risk
Improves investor confidence
Enables bundled cross-sell revenue
So What, What Next?
In 2025, smart lending is protected lending. Whether you're an MFI in Bihar, a fintech in Bangalore, or an HFC in Pune — loan protection insurance is your invisible safety net.
If you're looking to digitize insurance with zero friction and build an additional revenue stream — Xurance can help.
