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Letter for Applying Loan Against Insurance Policy

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Write a letter to a Divisional Manager of LIC and apply for loan against the Life Insurance Policy

Cross cut road,

Mani Nagar,

December 1, 2014.

The Divisional Manager,

Life Insurance Corporation of India,

IT Complex Road,

Sub : Loan against Life Insurance Policy No 99945 for Rs 10,00,000/-

I got myself insured for life for a sum of Rs 10,00,000/- (Rs Ten Lakh only), vide the said insurance policy in the year 2004.

Now I very badly need an amount of Rs 2,00,000 (Rs Two Lakh only) in connection with the marriage of my younger brother to be solemnized towards the end of the next month. Despite my best efforts, I could not arrange the required amount from any source.

In the view of the above, I want to take a loan against my Life Insurance Policy which I mentioned above. Please let me know the maximum amount of loan permissible to be under relevant rules. The various formalities to be completed in this regard may also be intimated to me. I shall be grateful if you kindly take necessary action in the matter at your earliest convenience.

Yours faithfully,

Deepika Manoharan

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How to Write a letter to the BM, LIC for a loan against your policy

Dear Sir/Madam,

I am writing this letter to request a loan against my LIC policy. My policy number is _____________ and I have been a policyholder with LIC for _____________ years.

I am currently in need of financial assistance due to some unexpected expenses that have come up. I believe that availing a loan against my LIC policy will be the best option for me as the interest rates are comparatively lower and the repayment options are flexible.

I would like to request you to kindly provide me with the necessary details regarding the loan process, eligibility criteria, and the amount that can be sanctioned against my policy. I would also like to know about the interest rates and the repayment options that are available.

I assure you that I will repay the loan amount in a timely manner as per the agreed terms and conditions. I have attached all the necessary documents required for processing the loan application.

I request you to kindly consider my request and provide me with the loan against my LIC policy at the earliest possible. I am looking forward to your positive response.

Thank you for your time and consideration.

Yours sincerely,

[Your Name]

LIC Policy Loan Application Form PDF

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LIC Policy Loan Application Form

This is a LIC Loan application Form issued by the Life Insurance Corporation of India & this form can be obtained from the nearest branch of LIC or it can be downloaded from the link given below in high-resolution and printable format.

A life insurance policy is meant to provide financial coverage to one’s dependents in case of an untimely eventuality. In addition to this benefit, certain types of life insurance policies also allow policyholders to take a loan against the surrender value of the policy. Keep in mind that you can only borrow a loan against your life insurance policy if your policy has acquired a surrender value. In this Form, you need to fill in some of the required information like your name, address, phone, Email, signature, etc.

Details to be mentioned in LIC Policy Loan Application Form

Name of the Applicants
Policy Number
Previous loan Amount
And any other Information

Eligibility Criteria

The individual should own an LIC life insurance policy.
The policy should not be a term insurance policy or unit-linked insurance plan (ULIP).
The policy should have acquired a surrender value.
The individual should be a citizen of India.

Documents Required LIC Loan Form

Application Form
Address Proof
Passport Size Photograph
And any other Documents

You can download the LIC Policy Loan Application Form in PDF format using the link given below.

2nd Page of LIC Policy Loan Application Form PDF

LIC Policy Loan Application Form PDF Download Free

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LIC Loan Application Form PDF

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Pros of a Life Insurance Policy Loan

Cons of a Life Insurance Policy Loan

The bottom line.

Life Insurance

Life Insurance Policy Loans: Pros and Cons

Katrina Ávila Munichiello is an experienced editor, writer, fact-checker, and proofreader with more than fourteen years of experience working with print and online publications.

If you want to borrow from your life insurance, you must own a permanent life insurance policy. Term life insurance policies do not have a cash value component, so they are not eligible for loans. However, if you own permanent life insurance, like whole or universal, and you have built up a reserve of cash within it, you can usually borrow from it.

Like any type of loan, there are pros and cons to life insurance policy loans . It is essential to look at all aspects of the transaction before deciding whether to borrow against your whole life insurance policy.

Key Takeways

You cannot borrow from term life insurance policies.
You can only borrow from permanent life insurance policies when you have built up enough cash value.
Unlike other loans, borrowing from an insurance policy doesn't require credit checks or payment plans.
You don't have to repay an insurance policy loan, but if you don't pay it back, you could owe taxes or face a lowered death benefit.
If you need quick access to cash, a life insurance policy loan is an easy way to obtain money.

It doesn't take long to access your loan funds.

You can use the loan funds for whatever you choose.

Loans do not have to be paid back.

Money from an insurance policy loan is not taxed as income.

The death benefit will decrease if the loan isn't repaid.

You will owe interest on the loan.

Failing to repay your loan may result in losing insurance coverage

Pros of a Life Insurance Policy Loan

It doesn't take long to access your loan funds: Getting a life insurance policy loan is quick and easy. Since you are borrowing against your own assets, there is no approval process, credit check, or income verification. Policy loans generally have a much lower interest rate than bank loans and do not charge high fees or closing costs. In most cases, they are also tax-free. Most companies allow you to borrow up to 90% of your cash value. After you request the loan, you will usually receive a check in about a week.

You can use the loan funds for whatever you choose: Because your policy's cash value acts as collateral for the loan, you can use the money for anything from household bills to a vacation. The insurance company does not require you to explain how you intend to use the funds.

Loans do not have to be paid back: Unlike with a bank loan or credit card, there is no required monthly payment for a policy loan and no payback date. You can pay it off in two months or let it sit without making any payments for years. However, an unpaid loan accrues interest that is added to your owed balance.

Money from an insurance policy loan is not taxed as income: Policy loans are not considered taxable income. You can borrow all your cash value, even earnings above what you paid in premiums, without owing income tax. In comparison, if you took money out with a withdrawal, you would owe income tax for taking out your earnings.

The death benefit will decrease if the loan isn't repaid: If you were to die before paying back your policy loan, the loan balance plus the interest accrued is subtracted from the death benefit that would be given to your beneficiaries. This could be a problem if your beneficiaries need the entire amount of the intended benefit.

You will owe interest on the loan: Between the time you take out the loan and the time you repay it, the insurance company will charge you interest on the outstanding balance. Paying down the loan reduces the interest accumulated, but the interest will continue to be charged until the loan plus interest is entirely paid off.

Failing to repay your loan may result in losing insurance coverage: If the loan balance increases above the amount of the cash value, your policy could lapse and risk termination by the insurance company. You would lose your insurance protection. In addition, your loan would then be reclassified as a withdrawal. You would owe income tax on any amount you received above what you paid in life insurance premiums.

What Does It Mean to Take out a Policy Loan?

A policy loan usually refers to a life insurance policy loan, which occurs when you borrow from the cash value component in your permanent life insurance policy.

What Are the Consequences of a Policy Loan?

First, you owe interest on the outstanding policy loan. Second, if you die with an outstanding loan, the insurer will deduct this from the death benefit so your heirs receive less money. Third, if the loan plus interest grows to exceed the value of your cash value, your policy could lapse and you would lose your life insurance protection. Weigh these consequences before borrowing.

Are Policy Loans Repayable?

Yes, policy loans are repayable. If you pay back the entire loan with any owe interest, your heirs would then once again receive the full policy death benefit after you pass away. After you repay a policy loan, you could also borrow the cash value again in the future.

How Is a Policy Loan Funded?

You fund a life insurance policy loan with your cash value. Permanent policies, like whole life and universal life, build cash value from your premium payments which you can borrow against while alive. After several years of premium payments, you should have enough cash value to borrow.

A big benefit of permanent life insurance is its cash value component, which you can legally borrow against after several years of accumulation. A loan lets you take out your cash value tax-free and use it however you want. But before borrowing, make sure you understand how an outstanding loan could impact your policy and the future payout for your heirs. Weighing the pros and cons of borrowing from a life insurance policy allows you to make an informed decision about whether a policy loan is right for you.

Progressive. " Pros and Cons of Life Insurance Loans. "

Harbor Settlements. "Should I Take a Loan Against My Life Insurance Policy?"

Farm Bureau Financial Services. " The Pros and Cons of Borrowing Against Your Life Insurance."

Western & Southern Financial Group. " Is Cash Value Life Insurance Taxable? "

Guardian Life. " What Are the Tax Benefits of Whole Life Insurance? "

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All you need to know about Loan against LIC policy

Deepesh raghaw.

July 22, 2016
Insurance Opinion

I do not like traditional life insurance plans and always advise readers to stay away from such plans. Traditional life insurance plans provide low life coverage and poor returns.

But what about those who have already purchased such a plan? Should such policyholders surrender the plan? Well, not always.

If you have already purchased the plan, surrender of the policy may not always be a prudent choice. The reasons include front loaded commissions and heavy surrender penalty.

If you work out the numbers, it may actually make a lot of sense to let the plan run its full course if you have paid premium for a few years. The outcome will depend on the plan features, surrender value, number of years of premium paid and the policy term. So, do not jump to any conclusion. Do some maths and make a decision subsequently.

The rationale is that the surrender value and the future premiums should yield much better results than the expected maturity value of the insurance plan. For instance, if you need to earn 14% return on surrender value and future premiums just to match expected maturity value of the insurance plan, it may actually make sense to continue. If the required return is only 6%, it is better to surrender the plan. Go through the following post for more on this.

Must read: Surrender, continue or paid up: What should you do?

If you have decided to continue the plan, you will do well to be aware of a fringe benefit that traditional insurance plans can provide.

Are you aware that you can take loan against your LIC policy?

In this post, I will discuss loans against LIC policies, eligibility, repayment structure or whether it makes sense to opt for such loans.

I pick up LIC New Jeevan Anand, a very popular participating non-linked endowment plan from LIC. The term and conditions will be similar for other plans too. The analysis in this post will be based on LIC New Jeevan Anand.

Must Read: Stay away from LIC New Jeevan Anand

How much can I borrow against my LIC plan?

You can borrow up to 90% of the Surrender Value of the plan (85% in case of paid up policies) as on date of application.

You can make an application for loan only once you have paid premium for three years.

It goes without saying that you can take a loan only once your policy acquires surrender value . Typically, LIC plans acquire surrender value only after 3 years.

You have to assign the policy to LIC as security.

How is the loan repaid? What is the loan tenure?

You get a lot of flexibility.

You have to pay interest every six months.

About the principal, you can repay the loan till maturity of the policy.

You just need to keep making the interest payments on time and you won’t hear from LIC about principal repayment.

Alternatively, if you wish, you can also repay principal along with interest.

In fact, if you do not repay principal even till maturity/death, LIC will automatically square off the outstanding loan amount against maturity/death benefit and pay the balance to you/ your nominee.

You borrow for a minimum of six months (minimum tenor). Even if you want to foreclose the loan before six months, you will have to pay interest for at least six months.

Book Suggestion : How to Retire Rich: Invest Rs 40 a day? (P V Subramanyam)

What is the applicable interest rate?

The interest rate is declared by LIC and may vary according to the insurance plan. You can enquire about the prevailing interest rate from the LIC.

As I understand, the prevailing rate of interest is 10.5% per annum.

Book Suggestion: How to Retire Rich: Invest Rs 40 a day? (P V Subramanyam). Hindi version is available too.

What If I default on my interest payment?

If you do not pay interest amount within 30 days from the due date, LIC reserves the right to foreclose the policy and settle the loan amount against the proceeds.

Illustration

If you are planning to borrow against your LIC policy, you need to find the current Surrender Value of the plan. Surrender value will determine your loan eligibility.

How to find the Surrender Value?

Well, you can simply call your agent or walk in to the nearest LIC branch to find out the Surrender Value. You do not have to go through the following exercise.

In this post, I will try to assess the Surrender Value for the particular scenario for LIC New Jeevan Anand. I do not guarantee that the value is accurate. But it will give an idea about how loan eligibility is calculated.

Let’s say you purchased LIC New Jeevan Anand 15 years back (by the way, the plan didn’t exist at the time) when you were 30. The Sum Assured is Rs 10 lacs and the policy term is 30 years. You have paid premium for 15 years.

The annual premium is Rs 34,387 (before Service Tax). For the first year, the premium will be Rs 35,590 (including service tax of 3.5%). For the subsequent years, the annual premium will be Rs. 34,988 (including service tax of 1.75%).

For LIC New Jeevan Anand, Surrender Value is the sum of

Guaranteed Surrender Value of Premiums paid (GSV)

Surrender Value of Vested Reversionary Bonuses (SVV)

There is also provision for the payment of Special Surrender Value, if it is more beneficial to the policy holder. However, I will ignore special surrender value for the purpose of this exercise. In any case, you don’t have to calculate this value on your own since it is readily available with your agent or at the nearest LIC branch.

Guaranteed Surrender Value is the percentage of total premiums paid till date excluding any tax or rider premiums. The percentage is a function of policy term and number of years of premium paid. The tabulation is provided in the policy document.

For instance, if you surrender the policy after 15 years, the applicable percentage is 70% for a policy term of 20 years and 60.91% for policy term of 30 years.

Guaranteed Surrender Value

= No. of years of premium paid * Annual Premium before Service tax * GSV percentage

=15 * 34,387 * 60.91% = Rs 3.14 lacs

Surrender value of vested reversionary bonuses is calculated in the same manner. You have a separate tabulation for applicable percentage in the policy document.

Let’s assume LIC announced Simple Reversionary bonus of Rs 49 per thousand of Sum Assured for each of those 15 years. Your annual bonus will be Rs 49,000.

You will have received 14 annual bonuses. Total Simple Reversionary bonus = Rs 49,000 * 14 = Rs 6.86 lacs.

Surrender percentage after paying 15 premiums in 30 year policy is 17.03%.

Surrender value of vested bonuses = 17.03% * 6.86 lacs = Rs 1.17 lacs

Surrender value of the policy = Rs 3.14 lacs + 1.17 lacs = Rs 4.31 lacs

Loan Eligibility = 85% * Rs 4.31 lacs = Rs 3.66 lacs

I have calculated the loan eligibility for the same plan in different years.

You can see loan eligibility grows as your policy grows older.

What are the benefits of loans against LIC policies?

Quick disbursal. It is your money. You can expect the loan disbursement to be swift.
Not much documentation required. Only the policy to be assigned to LIC. No additional security.
At interest rate of 10.5% per annum, it is much cheaper than personal loans.
You get a lot of flexibility. There is no EMI like repayment schedule. You can repay the principal and when you want. Can be very useful when you are facing cash flow pressure.

What are the drawbacks?

Since loan amount is linked to surrender value, you cannot expect to take a high value loan against the policy. You can see even after paying premium for 20 years, the loan eligibility is only 5.39 lacs (in the example discussed above).

There is no tax benefit for repayment of loan against LIC policy.

Points to Note

Loans are offered against traditional life insurance plans only.
Financial institutions other than LIC also offer loans against LIC policies. However, the rate of interest is typically higher than the rate charged by LIC. Can’t see why anyone would do that when LIC offers at a lower rate.
Even though I have calculated surrender value many times in this post, you do NOT have to surrender the plan to take the loan. You merely need to find the surrender value. If you surrender the plan, you won’t get any loan.
You can also request a second loan against the same policy while first loan has not been repaid. The cap of 90% of Surrender value shall apply to the combined amount.

How to apply for loan against LIC policy?

You need to submit Form 5196 to your agent or the nearest LIC branch to take out a fresh loan. For a follow-up loan (second loan), you need to submit Form 5205.

Now, you can apply for Loan from LIC and even make loan payments online

Do note that the loan application can only be initiated online. It cannot be completed online. There is an offline step involved.

You need to do is to register on LIC website. To register, you will need a few pieces of information such as your LIC Policy Number and a few personal details. You can go to the following link ( https://licindia.in/Home-(1)/LICOnlineServicePortal) and click on “ New User ”.

Once you have registered, you need to login by clicking on “ Registered User ”.

However, your job is not yet done. Once you log in, you need to subscribe for “ LIC Premier Services ”. You can apply for a loan against your LIC policy only once you are a Registered LIC Premier Services User.

To register as Premier User, you need to download an auto-generated form, take a print-out, sign the form and upload on the LIC site.

Hopefully, within a few days or weeks, your request for Premier Services Registration will be approved. Subsequently, you can apply for a loan online through the LIC portal.

Do note the link to Apply for loan online is available on the home page too. ( https://www.licindia.in/ ). You can click on that link too. However, you will still need to log in (after registering) into LIC portal and be a “Registered Premier Services User” before you apply for the loan.

A few screenshots of how to apply for Loan against LIC policy online

Link on the loan Page on LIC Home page or directly click on the following link ( https://www.licindia.in/home/policyloanoptions )

How to apply for loan against policy LIC loan online 1

Once you have logged in, you need to register for LIC Premier Services . Alternatively, you can click on Service Registration–>Service Request–>Premier Services Registration to complete the process.

How to apply for loan from LIC policy online LIC policy se loan kaise lein 3

Once you have completed this step, you need to submit the following documents at the nearest branch (and not your base branch).

Printed and signed Loan application form
Policy Document
NEFT Mandate form (for loan disbursal)

You need to submit these documents within 4 days of making the online application. If you fail to do so, your application will be automatically rejected and you will have to apply again.

You can track the status of your loan application or your application for Premier Services Registration under Registration–>Service Request–>Request Status .

PersonalFinancePlan Take

Traditional life insurance plans are poor products. However, if you are trapped in one, loan against the policy is one feature you can explore if you are looking for low cost debt.

Loan against LIC policy can be a cheaper alternative to personal loans.

Do note interest rate is important . 10.5% may be okay. However, if you get a loan at 13-14%, it may be prudent to actually surrender the plan and use the proceeds for your requirement rather than taking out a loan against the same LIC policy.

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88 thoughts on “all you need to know about loan against lic policy”.

Hi, I paid all the 5 installments of ICICI PRULIFE PINNACLE SUPER LP. Policy term is 10 years.Should I keep this policy or surrender it?

Hi Srinivas, I will have to go through the plan for the same. Can’t comment beyond a point without going through the plan. It is a ULIP. A lot depends on the funds you chose.

Not much issue even if you continue.

Hi Deepesh, After 5 years, the absolute return is 13%. I opted for 20%-40%-40% for highest NAV fund B, dynamic P/E fund and Multicap growth fund a year back. Before that it was 100% under highest NAV fund.5 years are completed now.All premiums are paid. policy Tenure is 10 years. Also, I am planning to buy a term policy, sum assured between 1 crore – 3 crores.Keeping all the above mentioned in view, how do you look at it?

You can take out the money then and invest in mutual funds. Assume there is no surrender penalty. Yes, bridge the insurance deficit by purchasing a term plan.

sir can I pay interest amount through check, and what are the possible ways to pay out the interest amount online?

Dear Isha, Please check with your agent/branch.

sir I’m not a lic policy holder but I want a personal loan from lic should it will be possible

I doubt LIC offers personal loans to non-customers. Please approach a LIC branch.

Does LIC send a letter once the loan against LIC policy is disbursed? or I have to check online?

Disbursal will happen through either through cheque or NEFT. Please check with LIC branch for such operational details.

I want to surrender my 2 years old New Jeevan Anand policy! My sum assured is 15 lakh, tenure 25 years and I pay monthly 5300 rupees premium for this! If I surrender after 3 years how much will I get? I understand that it’s 30% of the premium paid so far if surrendered after 3 years, I am not sure. Also, will I get Surrender Value of Vested Reversionary Bonuses (SVV)? Note that it has been 2 years since policy and to complete 3 years I have to pay 12 more installments. Which would be beneficial; surrender now or after one more year? If I surrender now I won’t get anything.

The best thing what i can say is…Don’t think of surrendering the policy. It is one of the Best Policy. If u can pay for one more year , u just continue ur premiums and after 3 years u just apply loan and start paying interest along every 6 months. If u have already made up ur mind to surrender, then i shall advice u to leave the policy as such than paying it for 1 more year, which would result in lesser returns.

Regards Mithun R G ( LIC Advisor) ([email protected])

I have my LIC and paying for last 2years can I tacke alone against it

You can do that once your policy acquires paid up status. Typically, it is 3 years.

Can i get loan second time against same policy???

Yes. The cap on the loan amount will still apply. Please check with your agent or local branch.

What things are required to apply a loan.

Please constant your LIC agent or your nearest LIC branch.

Do i need to go same branch to take the loan as it is mentioned in Policy?

Contact the nearest branch.

Can a policy holder avail a second loan on a policy ( of course subject to 90% of SV) before the earlier loan is fully repaid?

I think so. Please talk to your agent or contact your nearest LIC branch.

Sir, I have a Jeevan Tarang policy of SA for 20lakhs for 20yrs term. I completed 6 yrs and now paying 7th yr premium. Got the below info from LIC branch: Total premium paid = 6,25,000 Total vested bonus = 6,00,000(approx) Surrender value = 4 lakhs plus(approx) Loan eligibility = 7 lakhs. If i opt to take this loan of 7 lakhs and decided not to pay it back and discontinue the premiums, will there be any problem?

Yes, there will be a problem. Loans are meant to be repaid.

Thanks for the prompt reply. But i got this suggestion of taking loan and not paying back from the LIC agent. He told me that since loan is taken from the policy value 12 lakhs (6.25 lakhs premium paid+ 6 lakhs bonus), if the loan is not paid back the policy will be closed and hence there won’t be any problem. And i’ll be benefited through this option since the surrender value is less than the paid premium.

Appreciate if you could tell, what kind of problems this option(loan taken not payed back) will lead to.

If your LIC agent has said this, you should first stop working with that LIC agent.

Perfect Response sir

Hello Sir, we have paid lic loan of Rs. 1,28,000/- just now I just want to know, is its interest part or loan repayment part is tax deductible .? Please suggest..

Hi Pooja, No tax benefit for repaying such loan.

I have taken money back lic policy in 2007. Paying premium of 32400 per annum(opted quarterly payment). Every 5years I can withdraw the money and I did so in 2012. Now this year I might get some money which I can with draw only in November 2017. Now I need urgent 2lakhs is possible i can take inadvance whatever money am eligible or should I go for loan? Please suggest?

Hi , I have taken ICICI prudential life insurance policy , The minimum lock in period is 5 yers. I paid 3 annual premiums. The NAV is less than what ever I paid. I am paying Rs. 1.00 lacs p.a . Till date I paid 3.00 lacs. But the NAV is less than 3.00 lacs. Is is wise to continue the the payment????

Hi Vijay, Can’t comment without knowing more about you, your policy and the fund choices. As I understand, it is a ULIP. ULIP provide market linked returns. Therefore, scenario as mentioned by you can happen.

Sir can I apply for a loan against my policy from any branch in an state.

Not sure. You can check with your agent.

Sir how can I apply for lic loan

Hi Nikhil, Please contact your LIC agent or the nearest LIC branch.

can loan be taken against market linked plans.

I doubt that. Some insurance companies or NBFCs may offer.

LIC, What amount of interest I have to pay if I want to settle principal from claim amount ?

No extra interest, regular interest rate for your loan

I have Jeevan Anand policy with paying yearly 42K and till now i have paid 9 times. I would plan to take loan for this policy so how much i will get OR if i surrender the policy how much i will get. If i take loan how to pay the amount.

SA is 600000

Kindly suggest me.

Thank you for your kind help. Srinivas

Hi Srinivas, Please talk to your agent. He/she will help you with more accurate numbers.

Sir, During my policy period, I have taken housing loan from LICHFL against my policy document. Now, My policy came for maturity. I have submitted my maturity form to my home branch. They asked endorsement against my home loan. What form to be submitted to them ?

Please talk to your LIC agent.

Can I pay loan interest only by partly of Lic policy

Can I pay loan interest by partly only of LIC policy

Atleast the interest has to be paid in full.

Sir I want to know best single premium plans and when can I avail loan on this single premium policy

Strange. Why do you want to purchase a single premium plan and taken loan on it? Simply use the funds for the purpose for which you want to take the loan.

Can I pay the interest of my loan against lic policy in any of the branches or should it be paid only in the branch from where the loan is issued.

Please check with the agent or the nearest branch.

If I take loan against my traditional LIC policies which had bonus accrual option, is it so that bonus accrual is stopped because I realise that my accrued bonus amount has stayed the same ever since I took the loan in Feb, 2016. My LIC Agent is clueless and not able to answer.

Why would bonus stop if you take a loan? Loan does not affect policy payouts.

Hi Deepesh Sir, I have followed the steps and completed the Premier Services Registration. And surprise! they validated it in 1 day!!

I have Jeevan Shree (Plan-112) and Sum Assured is Rs. 5,00,000 and Policy Status is “Fully Paid-Up”. The premium was Rs. 24472 and payable for 16 years starting from Feb-2002 and ending in Feb-2017. Date of maturity is in Feb-2017.

The problem now is the loan amount is appearing to be Rs. 0.0. And LIC website says that policy is not eligible for loan. Can you please see why this is so?

Thanks in advance for your reply!

— Anurag

Correction: Date of maturity is Feb-2027

Hi Anurag, Difficult for me to comment. For all you know, this could be a technical glitch. Contact LIC if you are facing problems. I assume your policy is eligible for loan.

Dear Sir, I need a loan against my LIC policy,but i am not clear how loan EMI is paid.. means it will adjusted in Policy premium amount or i have to pay EMI additional to my LIC Premium ?

Please help !!

Dear Rajiv, Yes, you have to pay additional amount.

If I take loan on a policy then later can I make it paid up?

I don’t see a problem. Will have to check if you can do that during the term of the loan. If you don’t pay premium, the policy automatically becomes paid up.

sir ,I have requested to grant a loan but the request is taken and when I went to track the loan status it shows that no request has taken but on my email a message has came of confirmation that the request has received with the request Id***************.Now, I’m confused that my loan is requested or not And if not what to do now because when I went again to apply for loan a notification came of not eligible.And if yes how can I track that.

Hi Ankur, To be honest, difficult for me to comment. I have never applied for LIC loan. Therefore, I do not have operational knowledge. In my opinion, since you got an e-mail, something should have gone through. Suggest you try their phone helpline.

thanks sir for your opinion

That is a technica glitch i think. i did the same and the status is missing. I am approaching my home branch today to submit my documents. lets see what happens there.

PS: Submit the policy to your HOME LIC Office only.. otherwise there is wide spread confusion even amongst LIC employees too on this ONLINE systems even after all this time..

Thanks Nish for your inputs. Really appreciate your input.

Hello, Sir how much time it will take to get loan amount after applying for the loan ..? What is the best policy for my daughter in LIC ? I am a middle class family man, I have 3 years old daughter.

Dear Babu Can’t comment about the time it takes to get the loan amount in your account. Suggest you talk to the nearest/home LIC branch. Your daughter does not need life insurance. You do. I suggest you purchase pure term insurance plan for yourself. You can purchase from LIC too. For your daughter, suggest you look at PPF and Sukanya Samriddhi Scheme. IF you can take some risk, you can invest some portion in equity mutual funds too for her education.

I have taken lic endowment policy for 10 years am\nd yearly premium is Rs.5000/-. I have paid the premium for 7 years without any default. During the 8th year I have borrowed a loan of Rs,27000/- and after that I am not in a position to repay the premium as well as interest for loan. In this situation if I am foreclosure the policy how much amount I will get? Pl. comment

LIC will give you back the money only after squaring off the principal and interest amount. Please contact the branch in this case.

I have jeewan saral policy from april 2010. I have paying 12250 quterly. What is death amount, maturity amt, loan amt, surrender amt. My present age is 32 years. Is a real for this policy known for death policy or also benefit for maturity. May i close or not this policy

Continue the plan.

I have a jeevan anand policy paying 20K annually. I have paid 10 times. How much loan I can get, What is the process of availing online. In how much time I can get the loan amount in my account.

Ashish, The details and the process are provided in the post. For the exact loan amount, please contact your agent or the LIC branch. It is 90% of the surrender value. Therefore, unlikely you will get loan for more than 1.25-1.75 lacs. I have not tried the process myself. Not sure of the turnaround time.

Hi Sir, I lost original bond.. What I need to do? It is required one?

Please contact your LIC branch.

I am paying premium for the past 15 years and now I am planning to avail 40000/- loan from LIC but at the same time i am not interested to repay the loan now I have the following doubts to be clarified 1) Is that Mandatory that i have to repay the loan 2) I came to know that interest alone has to be paid on a half yearly basis if not the interest will be compounded 3) If I dont pay the loan amount of 40000/- is there any provision that they can deduct the same from the maturity value and pay back the balance ex: my maturity value is 175000/- (175000-40000=135000/-) will they credit 135000/- to my account or is there any other hidden charges i have to pay can you just clarify on the above

Any loan that you take has to be repaid. If you don’t repay, the amount will be squared off from your maturity proceeds. If you pay interest regularly, there can be no compounding.

Hi Deepesh Raghaw sir Iam Sam I have one doubt I applied online loan the application says please submit all required documents at any near branch but my problem is the Lic policy belongs to my mom and she was in mnj cancer hospital how can I take her into a Lic branch. In this case can I go to submit the forms in Lic office is that sufficient r any process there. Definitely my mom didn’t come Bcz she in hospital how can go further process is the candiat mandatory ans me sir

Hi Sam, I understand your concern. I am not very sure about this. Believe you can give it a try (visit the home branch with documents). You can get the documents signed by your mother and see if it helps.

Sir after applying for loan online on my lic policy Is payment is account transfer or by check

I have not applied. But, I believe you will get an option to specify how you want the money.

Hi sir, I wanna know that if I take loan on my lic policy of which I m paying premium since 8 to 9 years and then I don’t pay interest as well as other premium then what will happen to my policy..

LIC will foreclose your policy and recover funds.

please sir tell me sir mein 1000 rupai per month deta hoon lic mein aur meri money back policy hai 5 years complete ho gaye hai policy ko first money back bhi aa gaya hai 30000 agar mein money back lene ka baad loan leta hoon to kitna amount mil jayega

Hi I have applied for loan against my LIC policy How many days it will take to disbursement ??

Hi Im 59 years old and purchased lic old jeevan anand policy in 2008 for ppt of 30 years and paying premium for last 12 years. should i surrender the policy or leave it as paid up policy or continue paying premium till maturity. what is your suggestion as term plan at this age are very costly.

sir mein 1000 rupai per month deta hoon lic mein aur meri money back policy hai 5 years complete ho gaye hai policy ko first money back bhi aa gaya hai 30000 agar mein money back lene ka baad loan leta hoon to kitna amount mil jayega

Does it affect CIBIL if loan on LIC policy is not repaid and LIC adjusts it?

Registration granted by SEBI (INA100002719), membership of BASL (BASL1359), and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors. Investment in securities market are subject to market risks. Read all the related documents carefully before investing.

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Taking a Loan On LIC Policy Online: Procedure and Benefits

Updated on :
August 26, 2023

In times of financial need, exploring all available options for obtaining a loan is crucial. One lesser-known avenue is leveraging your existing LIC insurance policy to secure a loan. A loan against LIC policy allows policyholders to access funds quickly and conveniently.

We are here to guide you through the process of taking a loan against an LIC policy online, covering eligibility requirements, the application process, required documents, loan amount and interest rates, as well as the benefits associated with this borrowing option.

Eligibility Requirements for a Loan on LIC Policy

The eligibility requirements for a loan on an LIC policy determine who can qualify to avail of this borrowing option. These requirements may vary slightly depending on the specific policies and terms set by different financial institutions. However, the following are some common criteria typically associated with eligibility for a taking a loan on an LIC policy:

Possession of an LIC policy

To be eligible, you must hold a life insurance policy with a surrender value. The surrender value refers to the amount that the insurance company will pay you if you decide to terminate or surrender the policy before its maturity date. Policies like term insurance or pure risk cover may not be eligible for such loans, as they do not accumulate a surrender value.

Minimum policy tenure

The policy should have been in force for a specific period, usually three years or more. Financial institutions require a minimum policy tenure to ensure the policyholder has made sufficient premium payments and that the policy has acquired a substantial surrender value.

Policyholder as assignee or owner

Generally, the policyholder should be the assignee or owner of the policy to qualify for a loan against it. This means that you, as the policyholder, should be the person who has the authority to assign the policy’s benefits or make decisions related to it. In some cases, if the policy is assigned to someone else, they may be required to give consent or be involved in the loan process.

Lender-Specific Requirements

While the aforementioned eligibility requirements are typical of most lenders, there may be additional criteria set by individual financial institutions. These additional criteria might include factors such as the policy’s minimum surrender value, the policyholder’s age, creditworthiness, and other specific terms determined by the lender

Documents Required:

When applying for a loan on your LIC policy online, you will probably need to provide the following documents:

Policy documents : Submit a copy of your life insurance policy.
KYC (Know Your Customer) documents : This includes your identity proof (such as Aadhaar card, passport, or driver’s license), address proof (utility bills, rental agreement, or bank statement), and recent passport-sized photographs.
Loan application form : Fill out the online form provided by the financial institution.

How to Apply for a Loan Against LIC Policy?

Taking a loan on your LIC policy online is a relatively simple process. Follow these steps to initiate the application:

Visit the official website of your insurance company or a trusted financial institution that offers such loans.
Navigate to the loan on an LIC policy section and explore the terms and conditions, interest rates, and loan features.
Fill out the online application form with accurate details, such as policy number, policyholder information, loan amount required, and preferred loan tenure.
Submit the application along with the required documents, which we will discuss in the next section.
Once submitted, the financial institution will review your application and assess the policy’s surrender value to determine the loan amount you are eligible for.
If approved, the loan amount will be disbursed directly to your bank account or as per the agreed-upon terms.

Lenders Offering Loans Against LIC Policy

LIC Housing Finance is a subsidiary of Life Insurance Corporation of India (LIC). It offers loans against LIC policies at competitive interest rates. The loan amount is up to 90% of the surrender value of the policy and tenure of the loan is up to 15 years.
IDBI Bank offers loans against LIC policies to its customers. The loan amount is up to 85% of the surrender value of the policy. The tenure of the loan is up to 10 years.
SBI Life is a joint venture between Life Insurance Corporation of India (LIC) and State Bank of India (SBI). It offers loans against LIC policies to its customers. The loan amount is up to 80% of the surrender value of the policy. The tenure of the loan is up to 15 years.
HDFC Bank offers loans against LIC policies to its customers. The loan amount is up to 85% of the surrender value of the policy. The tenure of the loan is up to 15 years.
Axis Bank offers loans against LIC policies to its customers. The loan amount is up to 80% of the surrender value of the policy. The tenure of the loan is up to 12 years.
Kotak Mahindra offers loans against LIC policies to its customers. The loan amount is up to 85% of the surrender value of the policy. The tenure of the loan is up to 15 years.

Note that some lenders classify life insurance policy as a security, which is why loan against LIC policy may come under the category “loans against security.” Make sure you have all the information you require before taking a loan against your LIC policy.

Loan Amount and Interest Rates

The loan amount you can avail against your insurance policy depends on various factors, such as the policy’s surrender value and the terms set by the financial institution. Generally, you can borrow a percentage of the policy’s surrender value, typically ranging from 80% to 90%. Interest rates for such loans are often lower compared to traditional personal loans , as the policy acts as collateral. However, it’s important to compare rates among different lenders to ensure you secure the most favorable terms.

Benefits of Taking a Personal Loan Against LIC Policy

Taking a loan on your insurance policy online offers several advantages:

Quick access to funds : By opting for this type of loan, you can receive the required funds swiftly, without a lengthy approval process.
Lower interest rate s: Since the policy serves as collateral, interest rates are generally more affordable compared to other unsecured loans.
No impact on policy benefits : Taking a loan on an LIC policy does not affect your existing policy benefits or coverage. Your beneficiaries will still receive the sum assured in case of your demise.
Flexible repayment options : Financial institutions often provide flexible repayment tenure options, allowing you to choose a plan that aligns with your financial capabilities.

Taking a loan on your LIC policy online can be a viable solution during financial emergencies or for meeting specific financial goals. By following the steps outlined in this blog, you can explore this borrowing option with ease. Remember to carefully evaluate the terms, interest rates, and repayment options provided by different financial institutions to secure the best deal for your needs. Utilizing your insurance policy to access funds can provide a convenient and cost-effective solution to meet your financial requirements.

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Finnable is a personal loan app developed by Finnable Technologies Private Limited, which is a subsidiary of Finnable Credit Private Limited, a RBI licensed NBFC.

Security & Privacy Policy Finnable instant loan app ensures the safety of its customers via standard security. In simple terms, we do not share personal information with third-party apps.

Contact Us: Drop us an email: [email protected] Address: IndiQube Lakeside, 4th Floor Municipal No. 80/2 Wing A, Bellandur Village Varthur, Hobli, Bengaluru, Karnataka 560103

Responsible Lending Finnable has partnered with RBI authorised & regulated NBFCs/Financial Institutions. Our policies and services are fully regulated and legally compliant.

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Finnable is one of the fastest growing financial technology (Fintech) start-up with an NBFC license from RBI providing hassle free loans. Our mission is to make Personal loans available in less than 24 hours

Example of Personal Loan for Salaried Professionals ✓ Loan Amount from ₹50,000 to ₹10,00,000 ✓ Repayment period (loan tenor) options vary from 6 to 60 months ✓ Annual Interest Rate (APR) is 16% to 26% (on a reducing balance basis) + processing fees of 3 to 4% on the principal loan amount ✓ For Example – a loan of ₹1,00,000 with an APR of 16% (on a reducing balance basis), repayment tenure of 12 months, processing fee of 3%. The processing fee will be ₹3,000 + ₹540 GST with monthly EMI will be ₹9,394. The total loan amount will be ₹1,03,540. Total interest payable over 12 months will be ₹9,191. Total loan repayment amount is ₹103540 + ₹9191 = ₹1,12,731 *These numbers are for representation only and the final interest rate or processing fee may vary from one borrower to another depending on his/her credit assessment. ✓ Loan Prepayment Charges: 3 to 6% charge + 18% GST on the remaining principal amount (allowed after 6 EMI payments) Why is Finnable the best personal loan app? Instant Loans within 48 hours: Gone are the days when you had to wait weeks & months to get a loan approved. Completely Digital/Paperless: Finnable instant loan app offers a complete digital service to help save time as well as paper! Why is Finnable the best personal loan app? Instant Loans within 48 hours: Gone are the days when you had to wait weeks & months to get a loan approved. Completely Digital/Paperless: Finnable instant loan app offers a complete digital service to help save time as well as paper! CIBIL Score Not Required for Taking a Loan: Unlike other personal loan apps online, you can take a loan even without an existing CIBIL Score No Hidden Charges: A key feature that makes Finnable one of the best loan apps available is transparency. There are no hidden charges whatsoever, making the entire process a smooth one. Finnable instant loan app offers a wide range of EMI plans. You can also use our personal loan EMI calculator to help you choose the perfect plan. Loan Eligibility Criteria for Salaried Individuals (No Blue-Collar Employees) •The net in-hand salary of the individual has to be ₹25k and above in metros or ₹15k and above in tier 2 & other cities •He/she should have worked for more than six months •First-time borrowers need to have a Finnable score of 650 •The individual should have valid Aadhaar, Pan & Address proof •Finnable Loan is currently available in 23 cities How to Apply for Instant Personal Loans Online? • Register with OTP • Ensure that you have the documents listed on the Web/App • Provide details of amount required, net monthly salary & any other EMIs • Do KYC & profile setup • Validate address with pin code verification • Select amount & tenure • Provide bank details

APR Charges The APR (Annual Percentage Rate) charges differ from person to person as it considers the different products availed and the risk profile of the customer. However, it generally ranges between 16%-26%.

Contact Us: Drop us an email: [email protected] Address: IndiQube Lakeside, 4th Floor Municipal No. 80/2 Wing A, Bellandur Village Varthur, Hobli, Bengaluru, Karnataka 560103 Responsible Lending Finnable has partnered with RBI authorised & regulated NBFCs/Financial Institutions. Our policies and services are fully regulated and legally compliant.

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What is a loan against LIC policies?

LIC policyholders can avail of loans against LIC policy after the policy acquires a surrender value. The loan can be taken against this surrender value of the policy. The surrender value is the amount of money policyholders will receive if they decide to discontinue the policy before maturity.

The key features of loans against LIC policy are:

1 The interest rate on a loan on LIC policy depends on the prevailing rates linked to government bond yields and the applicant’s credit profile.

2. Loans against LIC policy are only available to LIC endowment policyholders.

3. The loan amount sanctioned is an advance against the future surrender value of the LIC endowment policy.

4. The maximum loan amount is usually up to 90% of the surrender value for policies in force. For paid-up policies, the maximum is 85% of the surrender value.

5. The LIC insurance policy is held as collateral by LIC against the loan. LIC can withhold or terminate the policy if the applicant defaults on loan repayments.

6. Not all LIC policies have a loan facility. Policyholders must choose plans that specifically offer the loan feature.

7. If an outstanding loan with interest exceeds the surrender value, LIC has the right to terminate the insurance policy.

8. If the policy matures before full loan repayment, LIC can deduct the outstanding loan amount from the policy proceeds before disbursing the balance to the policyholder.

Eligibility criteria for LIC India loan against the policy

Here are the eligibility criteria for availing a loan against LIC policy:

1. The applicant must be a citizen of India.

2. The applicant should be at least 18 years old.

3. The policy must have a guaranteed surrender value.

4. The applicant must have a valid LIC policy.

5. The applicant should have paid at least 3 years’ premium in full for the LIC policy to avail the loan facility.

Here are some of the eligible LIC policy plans that can be used as collateral for securing a loan against LIC policy:

1. Jeevan Pragati

2. Jeevan Labh

3. Single-Premium Endowment Plan

4. New Endowment Plan

5. New Jeevan Anand

6. Jeevan Rakshak

7. Limited Premium Endowment Plan

8. Jeevan Lakshya

The application process for availing of a loan against LIC policies

The process is subject to changes by LIC. Here are the key steps to avail a loan against an LIC policy:

1. Offline method

To avail of a loan against LIC policy, offline, follow these steps:

Step 1: Visit the nearest LIC branch office and obtain the loan application form.

Step 2: Fill in the application with your policy details and required information. Attach KYC documents like identity proof and address proof.

Step 3: Submit the duly filled application at the branch along with the original policy bond.

Step 4: The LIC office will verify your policy details, premium payment status and surrender value to determine your loan eligibility.

If approved, LIC will sanction the loan and disburse the amount as per the product terms. The original policy will be retained by LIC until full loan repayment.

2. Online method

To avail of a loan on LIC policy online, follow these steps:

Step 1: Register for LIC’s e-services and login to your account.

Step 2: Check your policy eligibility for a loan and view applicable terms and conditions online.

Step 3: Fill out the application form online and submit it along with scanned copies of KYC documents.

Step 4: You may need to send original physical documents to the nearest LIC branch for verification.

Once verified and approved, the amount is disbursed into your account. Policy documents may be required to be deposited in physical form at the branch.

Terms and conditions to avail of a loan against LIC policies

The terms and conditions are subject to change by LIC. Below are some terms and conditions applicable for loans against LIC policies:

1. The minimum tenure of the loan is 6 months. Shorter tenures are not permitted.

2. Prepayment of the loan is allowed only after paying at least 6 EMIs.

3. In case of the unfortunate demise of the policyholder before loan maturity, interest will be charged only until the date of the demise.

4. If the policy matures during the loan tenure, the maturity claim proceeds can be utilised by LIC to first recover the outstanding loan with interest.

5. Only LIC policyholders with eligible endowment, moneyback and whole-life plans can avail of loans after acquiring the stipulated surrender value.

6. The policyholder needs to pay interest regularly as per the schedule to avoid loan foreclosure.

7. LIC reserves the right to terminate the policy if the loan with interest exceeds the surrender value.

Discover Tata Capital’s loans against securities

Loans against LIC policies allow policyholders to meet liquidity needs seamlessly. However, one must repay interest and principal on time to avoid policy termination or loan ballooning beyond surrender value.

At the same time, it is essential to look for the right lender to avail of a loan against securities . At Tata Capital, we offer competitive loans against securities interest rates , along with a high loan amount and minimal documents required for a loan against securities . To get an estimate of your potential EMIs, head over to our loan against securities EMI calculator. Apply for a loan against securities with Tata Capital today!

Visit the Tata Capital website or download the Tata Capital App for more information!

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How to Apply for Loan against LIC Policy Online

Deepesh Raghaw

In an earlier post , I had discussed how you can take loan against your LIC policy to take care of loan requirement. I had also discussed certain aspects as your loan eligibility and the applicable rate of interest for the loan. You can read the various aspects of loan against LIC policy in this post .

In this post, I want to touch upon an operational aspect i.e. how to apply for the loan. To apply for the loan, you need to contact your agent or the nearest LIC branch. If this sounds too much work for you, now you can apply for loan against your LIC policy online too . Not just that, if you have already taken out a loan against the policy, you can make loan repayment or interest payment online too. This is likely to simplify the application process.

How to Apply for the Loan against Your LIC Policy Online?

Firstly, you need to register on the LIC website. You can find the link to register on the home page of the LIC website ( https://www.licindia.in/ ). You can click on the “ Customer portal ” or directly go the following link ( https://licindia.in/Home-(1)/LICOnlineServicePortal ) . Click on “ New User ”. If you are already a registered user, you can simply log in. To register on the website, you will need your policy details and certain personal details such as PAN/Aadhaar/Passport. Needless to say, the details should match with the details as mentioned in the policy. Once you have registered, you can log into the LIC customer portal.

After logging in, you need to register for LIC Premier Services. You need to be registered as LIC Premier Services User to apply for the loan against your policy online. To apply for LIC Premier Services, you need to go to Service Registration ???? Service Request ???? Premier Services Registration .

This registration is a 3-step process. You need to download an auto-generated form. Take a printout of the form. Sign the form. Scan and upload the document on the portal. The service is available free of cost. Along with the signed form, you will have to upload scanned copy of your PAN (or Aadhaar or Passport) for identification. Subsequently, you can expect to get approval for Premier Services in a few days or weeks.

Once registered as Premier Services user, you can apply for the loan against your policy online by going to Service Registration ???? Service Request ???? Online Loan Request .

Points to Note/Disclaimer

You can also make payment for an existing loan through the LIC portal. You can simply go to the following link ( http://www.licindia.in/home/policyloanoptions )
My application for registration as Premier Services User is pending with LIC. You can check the status of your request at Service Registration ???? Service Request ???? Track Request Status .
Since my registration of Premier User is not yet complete, I am not yet sure the kind of information that is furnished by LIC on the loan application page or the kind of information you need to provide for completing the loan application.
It is possible LIC automatically displays your loan eligibility. In that case, you do not need to break your head over the eligibility aspect. You may have to provide information such as your bank account details. It is quite possible that the online application process may actually have an offline step. For instance, you may have to download an auto-filled form and send across to LIC office.
I have no real plans to apply for loan against my LIC policy. In that case, it is difficult for me to comment on how long it is going to take to get the loan money credited to your bank account. This is something you need to try out yourself.

How to Get a Loan Against LIC Policy

A life insurance policy aims to give financial protection to the survivors of the policyholder in the event of the death of the insured. But did you know that you can get loans against your LIC policies? Read ahead to know more!

What is a Loan on LIC Policy?

A loan against an LIC policy is a loan that can be availed against the security of your LIC policy. The policy gets assigned to the lender till the loan is paid back in full by the borrower. If the borrower is unable to pay the loan back, then the lender gets all the benefits that are accrued to the policy.

During the term of the loan, the insured will continue to pay premiums on the policy, as usual, the life cover will also continue.

A loan against an insurance policy is also available when the insurance policy is available from a private insurer.

What Kinds of LIC Policy Can Be Used for Availing a Loan?

Life Insurance Corporation or LIC is the biggest insurer in India which issues term plans as endowment policies. The same is done by many other private sector insurers like ICICI Prudential, HDFC Life, SBI Life, etc.

Life insurance policies can either be term policies or policies with a surrender value. Only endowment or money-back policies are allowed to be given as collateral/security against a loan.

You can take loans against different kinds of policies, like, term insurance plans, endowment, money back, whole life, or unit-linked insurance plans. This is because, in terms of insurance plans, the sum insured is payable only when there is the death of the insured. Unit-linked Insurance Policies that have values linked to the stock markets also may not be accepted as security for a loan by all lenders.

In other words, only those policies that have a guaranteed surrender value can be eligible for availing a loan. The surrender value of an insurance policy is the value payable when the policy is surrendered on any date.

For Example:

The payback may happen on 15 years of policy payment, getting to a certain age like 50, 60, etc. The maturity benefit (sum insured) in a moneyback policy can also be paid in installments. In addition to payment of maturity benefits, the sum insured as a lump sum amount is paid in case of the death of the insured.

Loan-Related Details of LIC Endowment Plans

The following table will tell in detail about the available endowment policies and their loan features -

Policy Name	Loan Eligibility	Maximum Loan Amount	Interest Rate
LIC’s Bima Jyoti	Should have paid 2 years’ premium	For in-force policies: Up to 90% For paid-up policies: Up to 80%	Up to 10-year G-Sec Rate p.a. +3.00%, compounding half-yearly
LIC’s Bima Ratna	Should have paid 2 years’ premium	For in-force policies: Up to 90% of Surrender Value For paid-up policies: Up to 80% of Surrender Value	Up to 10-year G-Sec Rate p.a. +3.00%, compounding half-yearly
LIC's Dhan Sanchay	Should have paid 2 years’ premium, under regular/limited premium payment. Any time after three months from the date of policy issuance or the expiry of the Free-look Period, whichever is later.	For in-force policies: Up to 90% of Surrender Value For paid-up policies: Up to 80% of Surrender Value	Up to 10-year G-Sec Rate p.a. +3.00%, compounding half-yearly
LIC’s Jeevan Azad	Should have paid 2 years’ premium	For in-force policies: Up to 90% of Surrender Value For paid-up policies: Up to 80% of Surrender Value	Up to 10-year G-Sec Rate p.a. +3.00%, compounding half-yearly or the yield earned on the Corporation’s Non-Linked Non-participating fund +1.00%, whichever is higher.
LIC’s Amritbaal	Should have paid 2 years’ premium, under regular/limited premium payment. Any time after three months from the date of policy issuance or the expiry of the Free-look Period, whichever is later.	For in-force policies: Up to 90% of Surrender Value For paid-up policies: Up to 80% of Surrender Value	Up to 10-year G-Sec Rate p.a. +300 basis points, compounding half-yearly or the yield earned on the Corporation’s Non-Linked fund +100 basis points, whichever is higher.
LIC’s New Endowment Plan	Should have paid 2 years’ premium	For in-force policies: Up to 90% of Surrender Value For paid-up policies: Up to 80% of Surrender Value	Based on the method approved by the IRDAI
LIC’s New Jeevan Anand	Should have paid 2 years’ premium	For in-force policies: Up to 90% of Surrender Value For paid-up policies: Up to 80% of Surrender Value	Based on the method approved by the IRDAI
LIC’s Single Premium Endowment Plan	After completion of one policy year	Up to 90% of Surrender Value	Based on the method approved by the IRDAI
LIC's Jeevan Lakshya	Should have paid 2 years’ premium	For in-force policies: Up to 90% of Surrender Value For paid-up policies: Up to 80% of Surrender Value	Based on the method approved by the IRDAI
LIC’s Jeevan Labh	Should have paid 2 years’ premium	For in-force policies: Up to 90% of Surrender Value For paid-up policies: Up to 80% of Surrender Value	Based on the method approved by the IRDAI
LIC’s Aadhaar Stambh	Should have paid 2 years’ premium	For in-force policies: Up to 90% of Surrender Value For paid-up policies: Up to 80% of Surrender Value	Up to 10-year G-Sec Rate p.a. +3.00%, compounding half-yearly or the yield earned on the Corporation’s Non-Linked Non-participating fund +1.00%, whichever is higher.
LIC’s Aadhaar Shila	Should have paid 2 years’ premium	For in-force policies: Up to 90% of Surrender Value For paid-up policies: Up to 80% of Surrender Value	Up to 10-year G-Sec Rate p.a. +3.00%, compounding half-yearly or the yield earned on the Corporation’s Non-Linked Non-participating fund +1.00%, whichever is higher.

Where Can a Loan Against a LIC Policy Be Availed?

A loan against a LIC policy can be availed from the insurer, Life Insurance Corporation of India, or LIC Housing Finance. Many banks also offer loans on LIC policies or policies issued by other private insurers

Some of the banks that allow loans against LIC policies are:

Kotak Mahindra Bank

State Bank of India

Interest Rates on a Loan Against Insurance Policy

The Life Insurance Corporation of India charges 9.00-10.00% interest based on the insurance plan. Whereas banks charge between 10.00-15.00% interest on a loan against an insurance policy.

Please note that most banks offer loans or overdrafts against LIC or other insurance policies only to existing account holders.

How to Avail of a Loan Against a LIC Policy?

There are two ways of availing of a loan against a LIC / Insurance Policy - online and offline. Let us look at them in detail -

Online Way of Getting a Loan on LIC Policy

You can get a loan against an insurance policy online only through insurance companies. LIC offers an option to its subscribers to apply for a loan on its online portal.

The steps are mentioned below -

STEP-1 : Register yourself on LIC portal .

STEP-2 : Go to ‘ Online Services ’ → ‘ Online Loans ’ option.

STEP-3 : This will take you to the ‘ Online Policy Options ’ where you can place a request for a loan under the ‘ Online Loan Request ’ tab.

STEP-4 : After placing the request, you may need to upload your KYC documents for verification.

Getting a Loan on LIC Policy by Offline Method

To get a loan by offline method, you would need to follow the steps mentioned below -

STEP-1 : Approach the nearest LIC office or a bank branch with the required documents like the policy document and the KYC documents like your identity and the address proof.

STEP-2 : Sign the required application form and get the particulars of the loan like the interest charged, tenure of the loan, etc.

STEP-3 : Finally, you get the loan in a lump sum or as an overdraft.

What Loan Amount Can I Get Against an Insurance Policy?

You can get an amount up to 70-90% of the surrender value of the policy. However, this will vary based on your policy and lender.

How Can the Repayment of the Loan Against the LIC Policy Be Done?

Normally LIC offers relaxed payment options for a loan against its policy. The loan repayment could be done in the following ways -

Pay interest and the principal in loan EMIs

Pay only the interest regularly and pay the principal in due course

Pay the interest regularly and adjust the outstanding loan amount (principal) against the maturity benefits

However, when you avail of a loan from a bank, you would have to pay back the loan in regular EMIs.

Important Features and Benefits of Availing a Loan Against LIC Policy

There are some important features and benefits that you should keep in mind before availing a loan against an LIC policy:

An LIC loan comes at a cheaper rate than a personal loan (10% onwards) or a credit card interest rate (36-48%)

Like a personal loan, a loan availed against an LIC policy can be used for any purpose

Availing a loan against a LIC/Insurance policy does not require a credit score. This can come across as one of the greatest advantages for an individual with a bad credit score or no credit history

The life cover on the policy will continue in spite of availing the loan. In case of the death of the insured (borrower), the death benefit will be paid after deducting the quantum of the outstanding loan

The processing time for a loan against an insurance policy is minimal especially when it is obtained from the insurer

Due to the various kinds of repayment available, the financial burden is lesser

A loan can be availed only after the policy accumulates a certain surrender value. This means it would be difficult to avail of a loan against the policy during the initial years

While availing of a loan against an LIC/Insurance policy seems easier and is also available at lower interest rates, you should avail of this loan with caution. Like any other loan, avail this loan only if you are sure of paying it back on time. Or else the beneficiaries of your policy may end up losing the benefit in case of any eventuality.

How to Get a Loan Against LIC Policy - Related FAQs

Yes, you can get a loan against your LIC policy. However, the eligibility will depend on your policy’s surrender value.

Yes, taking loans from LIC can be beneficial as it is a reliable source. The interest rates will also be lower as you will be taking a secured loan against your policy.

Usually, for in-force policies, you can get up to 90% of the policy’s surrender value. In case of paid-up policies, you can get up to 80% of the policy’s surrender value. To know the exact amount, you will need to get in touch with your lender or read the policy brochure.

Generally LIC charges a 10.00% interest rate calculated on a half-yearly basis. However, interest rates will vary depending on your lender.

As in any other loan, you will need to submit valid identity, address, and income proof. Apart from these, for an LIC loan, you will also need your policy papers or details of the policy. You might also need to submit additional documents based on your lender’s requirements.

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How to Avail Loan Against Life Insurance Policy

Life is full of surprises, and sometimes we face unexpected expenses or opportunities that require quick access to funds. In such situations, did you know you can leverage your life insurance policy to avail of a loan?

Whether you're facing unexpected expenses, planning a significant investment, or need a financial safety net, read this blog to understand the ins and outs of availing a loan against your life insurance policy so that you can make an empowered financial decision.

Steps to Take a Loan Against Life Insurance Policy

Here is a step-by-step guide to follow while applying for a loan against an insurance policy-

Step 1: Check Policy Eligibility

As per IRDAI guidelines, term insurance policies and unit-linked plans are not eligible for loans. However, traditional policies like money-back or endowment policies offer this facility. Ensure you have the right life insurance policy before applying for a loan.

Step 2: Determine Surrender Value

Verify if your policy has gained a surrender value by paying premiums for at least three years from the inception date. Only policies with a surrender value can be considered for a loan.

Step 3: Calculate Loan Amount

The loan amount depends on the surrender value of your policy, with most lenders offering up to 80%-90% of the surrender value for traditional policies.

Step 4: Find the Right Lender

Look for a lender who offers loan facilities against life insurance policies and explore their terms and conditions. Compare various options to find the most suitable one.

Step 5: Complete the Loan Application

Submit the loan application form, original policy documents, a cancelled cheque, and a payment receipt for the loan amount. The insurance policy will act as collateral for the loan.

Also read, Things to Keep in Mind While Applying for a Loan

Benefits of Availing a Loan Against Insurance Policy

Here are some of the prominent benefits of taking loan against policy-

Lower Interest Rates

Unlike personal loans, loans against life insurance policies generally have lower interest rates, making them a cost-effective borrowing option.

Quick Disbursement

Owing to the minimal documentation and straightforward processing, the loan disbursement is faster and provides timely access to funds in times of need.

Streamlined Approval Process

As the life insurance policy secures the loan, borrowers experience less strict approval processes than unsecured loans.

You may also want to know How to Apply for Instant Loan

Things to Know Before Applying for a Loan Against a Life Insurance Policy

Have a look at some of the things to consider while taking a loan on insurance policy-

Eligibility

Individuals, Hindu Undivided Families (HUFs), and sole proprietorships can apply for a loan against an insurance policy.

Interest Charged

Interest rates for such loans are typically linked to the base rate of the policy and premium paid.

Documentation

The loan application requires submitting an application form, original policy documents, a deed of assignment, and additional documents per the lender's requirements.

Repayment of Loan

Timely repayment is crucial during the policy term to avoid policy lapsing, and borrowers must choose between paying only interest or both principal and interest as per their financial capability.

Unlocking the potential of your life insurance policy to access a loan can be a game-changer in times of need.

By understanding the eligibility, benefits, and repayment process, you can gain the confidence to make savvy financial decisions and secure your future with ease.

So, when in need, don't let your policy sit there; explore the possibilities and embrace the financial flexibility it can offer!

Disclaimer: This blog is solely for educational purposes. The securities/investments quoted here are not recommendatory.

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What is Loan Against LIC Policy: Features, Benefits, Eligibility, Documents and How to Apply Online

A financial emergency can arise at any time. And, for certain types of loans , the borrowers need to pledge collateral. In case you do not have any assets to pledge but have a LIC policy, you can use it to get a loan. LIC provides credit facilities against an insurance policy that people can use to meet their financial needs. This article provides all the details regarding loans against LIC policy – its features and benefits, interest rates, eligibility criteria, documents required, how to apply online and loan repayment policy. Read on!

What is Loan Against LIC Policy?

A loan against LIC policy is a type of secured loan offered to the policyholders against the policy’s surrender value. While taking this loan, you have to deposit your life insurance policy as collateral. You can avail of this loan at low-interest rates to meet your financial requirements.

Features and Benefits of Loan against LIC Policy

Some of the features and benefits of borrowing a loan against LIC policy are as follows:

One of the most satisfying features of LIC is that it offers its policyholders up to 90% of the surrender value as their sum of loan.
There are various online platforms available from where you can apply for a loan against your life insurance policy.
The loan amount is calculated on the surrender value of your policy. The sum of money you can take as a loan is subjected to the rules and guidelines of LIC.
If needed, you can take help from the LIC policy loan calculator to verify whether the loan amount is sufficient for you.
The minimum time interval for loan repayment of LIC is 6 months.
You can save loan processing time by applying for a LIC loan instead of going to a financial institution.
The credit facility of life insurance policies is offered to sole proprietorships, firms, individuals, Hindu Undivided Families (HUFs), partnerships, etc.
The rate of interest for LIC policy is comparatively much lesser than a personal loan. LIC charges only a 10-12% interest rate for loans against the insurance policy.
You can track your loan information through various available online and offline networks.

Interest Rates of Loan against LIC Policy

Other than the Life Insurance Corporation of India, some financial institutions provide loans against the life insurance policies of LIC. The rates of interest on this loan are as follows:


Axis Bank	Starting from 10.25%
Kotak Mahindra Bank	Starting from 10.75%
Bajaj Finserv	Starting from 13%
LIC Housing Finance	Starting from 14.80%

Loan Against Securities - Interest Rates, Eligibility and How to Apply

Eligibility Criteria for a Loan against LIC Policy

Here are the eligibility criteria for a loan against LIC policy:

The least possible age of the borrower must be 18 years.
A borrower should possess a genuine LIC policy.
A minimum of 3 years of LIC premium must be entirely paid.
Mostly, financial institutions offer this credit facility to the Indian populaces.
The loan against LIC policy should possess assured surrender value.

Documents Required for Taking a Loan on LIC Policy

You have to submit the following documents while taking a loan against life insurance policy:

The original document of the policy
Properly filled application form besides passport-size photos
Identity Proof of the borrower: PAN Card, Aadhaar Card, Voter ID Card, Passport
Address Proof: Aadhaar Card, Electricity Bill, Voter ID card, Driving License
Income Proof: Statement of Bank Account, Salary Slips
Premium paid receipt

How to Apply for a Loan against LIC Policy Online?

Here’s a step-by-step tutorial on how to apply for a loan against LIC policy online:

You need to share your account details with the insurer so that the loan amount will be directly credited to your account.

Loan Repayment Policy

Usually, repayment of the loan can be made within six months or by the maturity period. But loans offered by LIC do not follow a similar principle. It provides no loan payment through the EMI system. Thus, borrowers find it easier to repay the loan.

The policy includes:

Make the payment of the LIC loan interest with the principal amount online.
Pay only the amount of interest while the principal amount can be settled on maturity.
After paying a few years’ interest, repay the principal amount at the time you have sufficient funds.

Individuals facing problems due to any financial crisis can avail of a loan against LIC policy. It has various advantages like low-interest rates and a lower repayment burden. If you are in a financial crisis and need a loan, you may consider a loan against LIC policy. However, talk to a LIC agent to get all the detailed information. You must also check if you can repay the loan without added financial burden.

Looking for urgent loans? Navi offers instant personal loans up to Rs. 20 lakh in a 100% paperless manner. Download the Navi app, apply and get the mount disbursed to your account within minutes.

FAQs on Loan Against LIC Policy

Ans: The starting interest rate of a loan against a life insurance policy is 10.50%

Ans: The loan tenure against a life insurance policy is a minimum of six months and a maximum up to the end of the maturity period.

Ans: Anyone can compute the life insurance premium with the help of a loan against the LIC policy calculator. All you have to do is enter the amount of money and age. Then, the calculator will do the rest.

Ans: Since this entire process of loans through insurance policy depends on your LIC documents, it doesn’t need any credit score requirement.

Ans: Yes. LIC India offers personal loans against LIC policy to individuals. Any professional with ages between 23-60 years is eligible for this loan.

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Loan Against LIC Policy Calculator, Eligibility, Interest Rates, Documents

LIC Policies provide insurance to the client on any adverse life events like death, accident, or illness. Apart from providing life cover to its customers, LIC Policies has a great benefit that allows Policy Holder to get Loan against LIC Policy .

What is a Loan Against LIC policy?

A life insurance policy from LIC or other reputed private insurers is one of the securities you can use as collateral to take a personal loan to meet your domestic or personal requirements. Life insurance policy has annual premiums which you need to pay to the company. If any risky life event takes place under the policy, then the receiver will get the amount of money according to policy or the maturity benefit will be given at the end of the policy. A most important benefit that people are not aware of is money can be reward under personal loans against it, to solve your high-priority situations. You will get 90% of the claim value if you are eligible. Policy claims will be calculated as per the time of availing of a loan.

Surrender Value – It means the amount that is paid by LIC on adverse events and policyholder decides to cancel the policy, the cash vault is called the surrender value. The surrender value of the policy gets increased with an increasing period of the LIC policy. Higher holdings periods give you a good amount of eligibility.

LIC Policy Plans Eligible for Loan

1. endowment plans.

LIC Jeevan Pragati
LIC Jeevan Labh
LIC Single Premium Endowment Plan
LIC New Endowment Plan
LIC New Jeevan Anand
LIC Limited Premium Endowment Plan
LIC Jeevan Lakshya  LIC Aadhaar Shila
LIC Aadhaar Stambh

2. Whole Life Plans

LIC Jeevan Umang

3. MoneyBack Plans

LIC Bima Shree
LIC Jeevan Shiromani
LIC NEW MONEY BACK PLAN – 20 YEARS
LIC NEW MONEY BACK PLAN – 25 YEARS
LIC NEW BIMA BACHAT
LIC NEW CHILDREN’S MONEY BACK PLAN
LIC Jeevan Tarun

4. Term Assurance Plans

LIC TECH TERM
LIC Jeevan Amar
LIC Anmol Jeevan II

5. Benefit rider plans

LIC’s Linked Accidental Death Benefit Rider
LIC’s Accidental Death and Disability Benefit Rider
LIC Accident Benefit Rider
LIC New Critical Illness Benefit Rider
LIC New Term Assurance Rider

Eligibility for Loan against LIC Policies

For applying for a loan against LIC you should go with the following approval process:

You should have your own activated LIC life insurance policy.
Your policy should be unit-linked or term insurance policy
The policy should have admitted defence value.
Citizens of India can only apply for LIC policies.

Loan against LIC Policy Benefits

The facility of claiming a loan against LIC Policy is only provided to partnerships, individuals, companies, and single owners of businesses or property.
You can get the loan on the surrender value of your LIC policy. Maximum cases get 70% to 90% of the surrender value of the policy.
An online application is available.
For getting the approval of a loan against your LIC policy, you need to submit a proven action on the document. It will assign the rights to borrow credits from your LIC Policy.
You can borrow more amount of value than surrender value by subjecting your LIC Policy.
You can get all the details of your LIC Policy tracked with online and offline networks.
Only pay interest on the sum you borrow not from the entire amount.
You can get instant personal loans against the security of your LIC.
You can borrow a loan against LIC itself or also from other banks.
If you are unable to keep you’re saving instant, then you do not need to close your running policy.
You can get a LIC Policy loan with a low interest rate.

Why Loan against LIC Policy is better than other Loans?

The LIC policy loans have several advantages over other loans:

There is no Guarantor or Security required for getting a loan from LIC.
You can flexibly repay your loan interest and principal amount.
LIC offers a very lower Interest Rate amount.
Available at all nearest bank branch where you live.

How to get Loan against LIC Policy?

If you fall under the eligibility criteria; you need to follow few steps to borrow a loan against your LIC policy :-

Visit any bank to the nearest branch.
Fill application form for a loan and submit it to the representative available there with the required documents.
Clients who already have a bank account in that branch will need minimum documents.
Submit form and all documents
A representative will submit your form further, and you will get the approval of the loan if the entire documents are correct and have no verification problem.
If the loan is approved, then the amount will be in your savings bank account.

LIC Policy Loan Interest Rate

LIC’s current rate of interest is ranging from 10% to 12% per annum. The loan will be secured itself by your Policy. Life Insurance Corporation charges a very low amount of interest with a friendly nature to pay the principal amount. It makes low interest so you can also go for a personal loan option. Banks that provide loans against Life Insurance Corporation policy are SBI, Axis Bank, Bank of India, ICICI Bank, and many others.

Documents Required for Loan against LIC Policy

A Policyholder needs to produce the following documents for a loan on his Policy :

Original LIC Policy Document
Address Proof (Ration Card, Aadhar Card, Electricity Bill or Passport)
ID Proof (Aadhar Card, PAN Card or Voter ID Card)
Income Proof (Bank Account Statement, Salary Slip, Form 16)

Also, check documents required for Home loans & Personal Loan :

Personal Loan Documents
Documents for Home loan

How to Repay the Loan on LIC Policy?

Repayment of LIC Policy loan will be lasting a minimum of up to 6 months and maximum up to your maturity of Life Insurance Corporation Policy. Life Insurance Corporation gives a very flexible repayment for the entire client who owns the LIC policy. If you wish to pay it early than six months, then you can.

You must Calculate the EMI to check your repayment capability using our EMI Calculator for the following:

Home Loan EMI Calculator
Personal Loan EMI Calculator

LIC Loan Repayment Plans

You can follow any of the Life Insurance Corporation repayment plans:-

You can pay the interest with the principal at the same time.
You can pay only the interest, and the principal amount will be calculated with the claim amount of the LIC policy.
You can pay only interest to LIC for a few years and then repay the principal amount when you have the availability of cash.
LIC loan payment is not like EMIs. LIC gives a lot of flexibility for repaying your loan interest and principal amount.

Frequently Asked Questions (FAQs)

You can get a loan against a list of approved LIC policy plans. These LIC Policy plans include unit-linked plans, endowment plans, whole life plans, and income plans from many insurers. However, a term insurance policy is not entitled to getting the loan on LIC Policies.

You can get a loan against the insurance policy of LIC starting at Rs 2 lakh, and up to 90% of the surrender value of the policy you applied.

Visit the nearest LIC Branch or Bank that provides a loan on LIC Policy and submit a filled-up Loan Against Security application form, the original policy document, address, ID, and income proof. The LIC Branch or Bank will inform you about details like loan eligibility, tenure, and interest rates.

The Loan Against LIC policy will be paid out as an overdraft into your linked Bank account. You can draw the funds from your account any time you want.

You need original policy documents, address proof, ID proof, and income proof to get the loan on LIC policy.

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Everything about getting a Loan Against a Life Insurance Policy

Posted on 02 June 2020 Updated on 22 June 2023

Some of the Important Features of a Loan Against Life Insurance Policy

The interest rate applied on a loan against a life insurance policy depends on the applicant's profile.
The interest rate for a loan against a life insurance policy is relatively low. Any loan taken from a bank has an interest rate of 12 to 14%. While the interest rate of personal loans availed through a life insurance policy is 10.5% to 12.5%.
To avail of the loan, the life insurance policy has to be surrendered to the bank, the lender or an insurance company. The loan amount is given as an advance on the policy's surrender value.
This loan is given only to the person having a life insurance policy. It is not given to a person holding any other term insurance plans.
The interest rate for a loan against a life insurance policy is relatively low. The interest rate of personal loans taken from banks is between 12 to 14%. While the interest rate of personal loans availed through a life insurance policy is 10.5% to 12.5%.
The loan amount depends on the surrender value of the life insurance policy. Usually, the loan amount is 90% of the policy value.
Defaulters will not get the maturity amount since this policy is held as collateral and will be terminated. It happens when the loan debt exceeds the policy's surrender value.
If the policy matures before the completion of the loan, then the insurance company deducts the difference amount from the maturity amount and the loan that is still pending. After these deductions, the maturity amount is handed to the policyholder.
A loan taken against a life insurance policy is helpful for those with a low credit score (it reflects the creditworthiness of a person). However, having a good credit score will be an added advantage. It can help in reducing the rate of interest charged on this loan.
Since the applicant already has a life insurance policy which will be kept as collateral, there is no further need for any additional documentation to prove if the person is eligible for the loan or not. Essential documents for KYC(Know Your Customer), like identity cards, residence proof, etc., are sufficient. Mobile numbers and email IDs are also required to provide updates for the loan application.
However, the original life insurance policy has to be submitted to the lender along with a letter agreeing to the terms and conditions of the lender, bank or insurance company.

Eligibility Criteria for Availing a Loan Against Life Insurance Policy

The applicant for this loan should not be less than 21 years of age.
The applicant should be an Indian citizen.
The applicant can either be a salaried person or a self-employed person.
The person must have a life insurance policy in their name.
This policyholder, who is also an applicant for a loan, must have a regular source of income.
Some banks are particular about the minimum amount of insurance policy that has to be taken by the applicant. Most lenders and insurance companies do not have any issue with the minimum amount of the life insurance policy.

Benefits of Taking a Loan Against Life Insurance Policy

A loan taken against a life insurance policy is a hassle-free process. It requires minimal documentation and is usually approved instantly. The chances of the loan getting rejected are next to none.
A loan against a life insurance policy is helpful for those with a low credit score. The credit score is usually checked for people who apply for a loan, which reflects a person's creditworthiness.
Since the applicant already has a life insurance policy that will be kept as collateral, there is no further need for any documentation to prove whether the person is eligible for the loan.
In case of the policyholder's demise during the loan tenure, the policy amount is given to the nominee after deducting the loan amount.

Documents Required for Loan Against Life Insurance Policy

A loan application form : All the relevant information must be provided here. This information is personal and residential details. The applicant should also submit bank details and contact details.
The original life insurance policy document has to be submitted. The original life insurance policy is kept as collateral by the lender.
A signed agreement states that the policyholder assigns the life insurance policy to the lender against a loan. It can be kept as collateral for the loan disbursed by the lender or the bank.

The Rate of Interest Against a Life Insurance Policy

The loan amount that a person can get on a life insurance policy, loan application against a life insurance policy, for the direct method:, for online loan application:, repayment of the loan taken against life insurance policy, disadvantages of taking a loan against a life insurance policy, type of policy:, smaller loan amount in the initial years:, the waiting period:, default in repayment will result in policy lapse:, conclusion:, faqs – frequently asked questions, is it compulsory to have a life insurance policy to avail of a loan insurance policy , how much loan amount is given to the person having a life insurance policy , what does one mean by surrender value concerning the insurance policy , what are the disadvantages of taking a loan against a life insurance policy , is it a good idea to take a loan against a life insurance policy .

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.

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Loan Against LIC Policy

LIC Life Insurance

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Financial emergencies are unpredictable and require the best course of action to tackle them. People may consider borrowing money, taking a loan, or burning their hard-earned savings. In such a challenging situation, making the right choice is vital. If you opt to take a loan, you may need collateral. But did you know your LIC policy can work as collateral to take a loan, i.e., saviour?

Life Insurance Corporation of India is a prominent name in the insurance industry. Taking a step ahead, the company also provides the facility to take a loan against LIC policy, enabling policyholders to stay financially secure when emergencies knock. This article discusses all the details regarding taking a loan against an LIC policy—its eligibility criteria, features, benefits, interest rate, and the process to apply. Read on!

When Can We Take Loan on LIC Policy?

A loan against an LIC policy is a secured and immediate financial solution where the loan is allowed against the surrender value without surrendering the policy. Generally, a LIC policy acquires the surrender value by paying two to three full-year premiums. You can take loans against LIC policy upto a fixed percentage of the surrender value.

When taking a loan, you need to deposit your LIC policy as collateral to the lender. These loans are available at low-interest rates and, hence, are less risky. Individuals can use these loans for personal or commercial purposes. If the loan is not repaid, the amount is deducted from the death and maturity benefits payable before disbursement.

What is the Eligibility of Availing Loan Against LIC Policy?

LIC of India grants the loan when the application fulfils all the terms and conditions mentioned in the policy. The prerequisites for policyholders to apply for and take a loan on LIC policy are as follows:

The existing LIC policy should be in force.
LIC policy should differ from a term insurance policy and ULIP plan.
The policy must have acquired a surrender value.
Receipt of the loan amount should be available.
Loans on the LIC customer portal are allowed if policyholders have registered for the premiere services.
You should have the citizenship of India.
The minimum age allowed is 18 years or above.

How Taking LIC Loan is Beneficial from Other Types of Loans?

There are certain reasons why borrowing a loan against LIC is more beneficial than other types of loans:

Comparatively lower interest rates

The interest rate charged when borrowing LIC loan is lower than other types of loans, like personal loans or unsecured ways of borrowing. The interest rates are calculated based on the total amount and the premium payment frequency. Generally, the interest rate for an LIC loan can be around 10-12% p.a.

Flexible repayment

When an individual borrows a loan from an LIC policy, they can choose to pay the interest once or twice a year. They get the flexibility to repay the principal amount at the end of the policy term or can also adjust the sum from their maturity and death benefit payout. This breaks out the mandatory EMI repayment method.

No guarantor or security required

Unlike other types of loans, such as gold or mortgage loans, individuals do not require any guarantor or provide security to the lender. The LIC policy itself is used as collateral.

Higher loan amount

Depending on the policy terms, the policyholders can get upto 80-90% of their surrender value as the loan amount, one of the highest options available in the market.

Faster loan disbursal

The loan against LIC policy is disbursed faster than other loans as no or minimum paperwork is required. An individual can avail of a loan within 3-5 working days.

Features and Benefits of Borrowing a Loan Against LIC

Some of the key features and benefits of borrowing loan against LIC policy are mentioned below:

The policyholder can avail of a loan of up to 90% of the surrender value.

Multiple online platforms are available where you can apply for a loan against your LIC life insurance policy.

One can use the LIC loan calculator to estimate the amount available on your LIC policy.

The minimum loan repayment period is 6 months.

It takes lesser loan processing time in comparison to other financial institutions.

LIC of India offers credit facilities to firms, individuals, HUFs, partnerships, etc.

The borrower can track LIC loan status through online and offline networks.

The interest rate is declared annually by the LIC of India and is based on the policy type selected.

The life cover facility and benefits continue while accessing the LIC loan amount.

The interest on the loan is payable on a half-yearly basis.

In case of a financial emergency, the policyholder can opt to avail of the loan rather than surrender your LIC policy.

The loan amount disbursed can be used for multiple purposes, like education, debt consolidation, financial needs, education, etc.

Since the loan is available against the policy, the credit score history doesn’t become stringent for policyholders.

Not all LIC policies offer loans, so it is important to check beforehand to avoid any inconveniences later.

What is LIC Policy Loan Interest Rate?

The interest rates for LIC loans depend on the policy type purchased, market conditions, loan amount, and other LIC terms. LIC offers loans at competitive and low-interest rates compared to other banks offering loans. However, to have a better understanding of the same, let’s have a look at the interest rates of different banks and financial organizations for loans:

Bank/ Financial Organization	Interest Rate (% per annum)
HDFC Bank	9.00 - 9.50
Axis Bank	9.50 - 10.00
ICICI Bank	9.25 - 9.75
Kotak Mahindra Bank	9.75 - 10.50
State Bank of India	9.75 - 10.25
Union Bank of India	10.25 - 11.00
IDBI Bank	10.00 - 10.75
Kotak Mahindra Bank	10.75 onwards
LIC Housing Finance	14.80 onwards

* The interest rates mentioned above are subject to change. We advise you to check the actual interest rates before availing of the loan by connecting with banks or financial institutions.

What is the Process to Apply for a Loan Against LIC Policy?

A policyholder can apply for a loan against LIC policy following both online and offline methods, as per suitability or comfort. Here’s the step-by-step guide you can follow:

Online Method

LIC of India offers the facility to apply online for a loan against LIC policy by following the given process:

Go to the official website of the LIC of India at www.licindia.in .

Scroll down to the ‘Other Online Services’ option and click ‘Online Loan’.

On the next window, select ‘Through Customer Portal’ under the Online Loan Request section.

As an existing customer, you must use your User ID and password to log in to the customer portal.

Once logged in, choose the required policy from the list against which you want to avail yourself of a loan.

Proceed further to make a loan request.

After placing the request, you must upload your KYC documents for verification.

Once verified, the loan is processed and disbursed within 3-5 working days.

The loan documents are sent to the registered email address for future reference.

Offline Method

Customers can avail of a loan against the LIC policy via the offline method by following the steps:

Reach the nearest LIC branch with the valid policy documents and KYC documents.

Duly fill out the LIC loan application form. Here, you get to know the eligible loan amount, interest rate, tenure, etc.

Submit the form with the required documents as asked by the advisor at the branch.

Once processed, the loan will be disbursed in a lump sum or overdraft.

What Documents are Required to Take Loan on LIC Policy?

The policyholder needs to submit the following documents to take a loan on the LIC policy:

Original policy documents
Duly filled loan application form with the updated photographs
Proof of identity of the borrower: PAN card, Aadhaar card, Voter ID card, Passport
Proof of address: Aadhaar card, electricity bill, Voter ID card, driving license
Income proof: Statement of bank account, salary slips
Premium payment receipts
Bank account details/ NEFT mandate

What is the LIC Loan Repayment Policy?

Life Insurance Corporation of India offers a flexible loan repayment facility. They do not require EMI payments but can be repaid within at least 6 months or by the end of the policy tenure (up to policy maturity). The policyholder needs to pay interest on the loan twice a year. If the borrower settles the loan within the first 6 months, they still have to pay interest for the entire 6-month period. The following conditions apply for LIC loan repayment:

Pay the interest for a few years and the due amount anytime when you have enough funds in hand (before the end of the policy term).
Pay the interest regularly and adjust the principal loan amount in death or maturity benefit payable.
Repay the principal loan amount with the interest online.

Note that Life Insurance Corporation of India can terminate the policy if the total debt amount is more than the surrender value of the policy.

Steps to Repay Your LIC Loan/ Interest Online

Follow the given steps to repay the loan or interest amount online:

Go to the official website of LIC of India
Choose the ‘Online Loan’ option from the ‘Other Online Services’ option.
The next window takes you to the ‘Policy Loan Options’ page. Here, select ‘Pay Direct’ or ‘Pay through Customer Portal’ as you prefer.

When you choose the ‘Pay Direct’ option:

On the next window, select ‘Loan Repayment’ or ‘Loan Interest Payment’ from the drop-down menu.
Click ‘Proceed’.
Fill in all the required details for customer validation and loan particulars.
Check the ‘I Agree’ box to proceed and click ‘Submit’.
Make the payment using the desired mode of payment.

When you choose the ‘Pay Through Customer Portal’ option:

Sign in with the user ID and password.
Choose loan repayment or loan interest option.
Make the payment using the preferred payment mode.

Bottom Line

Life Insurance Corporation of India has made the loan application process convenient and more accessible than many other ways to borrow money. LIC loans are less risky and have flexible repayment options. Customers can apply for and repay their loans in just a few clicks using the LIC customer portal. They can check the LIC loan status anytime using the LIC e-services portal.

If you need a loan against your LIC policy, you only need to have an LIC policy that has acquired the surrender value. Contact an LIC agent for assistance through the process. Use RenewBuy Advisor Connect to find a life insurance agent or LIC agent nearby.

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Policy guidelines & helpline, guidelines for policy holders.

We welcome you as a policyholder and as a prospective customer to our customer service section. This section will guide you through the various intricacies of a life insurance contract and the facts that you must know to make the best out of your life insurance policy. Please read our guidelines carefully.

Your Policy Bond And Its Safety

The policy bond is the document that is given to you after we accept your proposal for insurance. The risk coverage commences after acceptance of your proposal and the conditions and privileges of your policy are mentioned in the policy bond. This is an important document which would be referred to for various servicing interactions with you – Keep the policy bond safe. It will be required at the time of settlement of claims on the policy. You will also require it if you are availing a loan or want to assign the policy. Inform your spouse/Parents/Children as to where the policy is kept. In case you are handing over the policy bond to any person or office, please take a written acknowledgement. Keep a Photostat copy of the policy for your reference.

Your Policy Number

The policy number is consisting of nine digits and can be found at the top left hand corner of the schedule of your policy bond. This is a unique identification number that distinguishes your policies from other policies and will remain unchanged throughout the lifetime of the policy. Remember to quote the policy number every time in your correspondence, as it helps us to locate your records for reference.

Policy Conditions

Every policy is taken for different types of needs; therefore the conditions for your policy will vary according to the Plan and Term of the policy. The policy schedule contains on the first page of your policy, like the ones mentioned above as well as other information like nominee, your address etc. It also shows the date of commencement of your policy, date of birth, date of maturity, due dates and months in which the renewal premiums are to be paid etc. The second page onwards carries the various policy conditions like risk coverage, additional risks coverage if opted for, standard benefits that are available for all policies, accident benefit if opted for, exclusion of risks if any and other conditions that govern the contract of insurance. Apart from death benefits there are other standard benefits and benefits opted by the policyholder, which you might want to familiarize yourself with ( Click here to know more about various types of policy conditions and their implications).

Alterations In Policy

There may be instances when you would like to make alterations in your policy like change of premium payment mode, reduction in premium paying term etc. Your applications may be given in writing to the branch that services your policy for our further action. There are different types of alterations that are allowed on our life insurance policies( Click here to know more about alterations).

If Your Policy Is Lost

Kindly make a thorough search before concluding that you have lost the policy bond. Look for the same within your residence, among your investment papers, at your office and even with your agent to whom you might have entrusted the document for some reason. It could have been even pledged with LIC/any other financial institution for availing a loan by you. LIC retains the policy bond when you go in for a loan against the policy. Make sure that the document you are searching is not one that has already been assigned to LIC, or to another financial institution. If the policy bond is partially destroyed due to natural causes like, fire, flood, etc, the remaining portion may be returned as evidence of loss of policy to LIC, while applying for a duplicate policy. In case you are sure that the policy bond is untraceable due to unknown causes, there is a simple procedure to comply with while applying for the duplicate policy at the branch that services your policy ( Click here to know about obtaining duplicate policies).

Your Contact Address – Keep Us Posted Without Fail

Your address is very important for us. Without your latest address we would not be in a position to contact you for any service offering. We would not like to keep any benefit that is due to you pending for want of this very important information. Whenever you shift residences, please inform the new address to us. Otherwise any communication we send to you, like premium notices, discharge vouchers for maturity and survival benefits etc., will get delayed in reaching you. LIC provides for change of addresses, inclusion of telephone numbers, mobile numbers and email addresses in your contact addresses information. Kindly inform your servicing branch to incorporate the same in your policy records.

Admission Of Age

Check your policy bond and see if your date of birth is correctly given therein. This is one of the factors on which the premiums you pay for your policy is arrived at. This would also form the basis of all future policies you might avail from us. In case your earlier policies do not have your date of birth incorporated and you do have a date of birth certificate issued by the competent authority, you may send an attested copy of the same to us, with a request to admit your age ( Click here to find out the certificates of age that LIC accepts.)

Ensure that the nominees name is correctly incorporated in the policy bond. You may change the nomination in your policy any time during the lifetime of the policy In case you have not included the name of the nominee till now, please do not delay; inform us your nomination immediately. Kindly note that the change of nomination has to be done in the branch that services your policy. The nominee is the person to whom the insurance claim amounts would be payable, in case anything unfortunate within the purview of the policy conditions happens to you. The policy is usually taken by you to benefit your family – nominate the persons who’ll have the welfare of your family in your absence; the usual preferences being spouse and children. You may nominate even minors like your children, in which case you have to name another person who’ll have the welfare of the minor children, as an appointee( Click here to know more about nomination).

In case you are raising a loan against your policy from LIC or any other financial institution, your policy would have to be assigned to LIC or the financial institution. When you assign the policy the title of the policy is shifted from your name to that of the institution. The policy would be reassigned to you on the repayment of the loan. A fresh nomination should be done after reassignment of the policy. Assignment of policies can be done even when a loan is not required or for some special purposes (To learn more about assignment Click here ).

When To Pay The Premiums

Remember to pay your premium in time, even if our notices do not reach you. There may be a postal delay. LIC usually sends premium notices one month in advance to the due month of the premium. The due months of the premium are given in front page of the Policy bond.

In case you have not paid the premium within the due date there is still time for you to make the payments without payment of interest on the premium. This period is called the grace period. (With the exception of some plans) The grace period for policies where the premium payment mode is monthly is 15 days from the due date. The grace period for policies where the premium payment mode is quarterly, half-yearly or yearly is one month but not less than30 days.

How And Where To Pay The Premiums

By cash, local cheque (subject to realization of cheque), Demand Draft at Branch Office.
You can pay your premiums at any of our Branches as 100% of our Branches are networked.
A policyholder can pay premium online without visiting the servicing branch. The option is available in CUSTOMER PORTAL under Online Payments Tab. Policyholder can also pay it by using PAY DIRECT option after keying in relevant information like Policy number, Insurance Premium, Date of Birth, Mobile number and Email id. E-Receipt will be sent to the email id registered by the policyholder and it will also be available in his/her Portal account.
LIC premiums can be paid by using Net Banking accounts with following banks: For Authorized Banks Click Here. Other modes of payment are Debit-Cards (VISA/MASTER/RUPAY), Wallets, Payment banks, UPI and Credit cards (AMEX/VISA/MASTER/RUPAY). There are no charges for payment through Debit-card, Net-banking, Wallet and UPI.
Payments through Credit Cards are subject to a "Convenience fee". The "Convenience Fee" applicable is entirely absorbed by LIC.
The premium receipt for the payment through Portal/Pay Direct can be printed online and will also be e-mailed to the Policy Holder at the same time. Simultaneously successful/unsuccessful transaction message will be flashed.
Policy holder can also opt for payment of premium through NACH mode where mandate to debit the premium from bank account as and when due is to be submitted. Detailed procedure is given under F&Q section.

Policy Status – Where Available

Status of your policy indicates if your policy is in force or has lapsed due to non-payment of premium. It also provides other important information with respect to your policy, for your reference. The status of your policy is available at the branch that services your policies. It is also available through our Interactive Voice Response Systems in select cities ( Click here to find out if your city is covered). In cities connected by our computerized networks the status will be available in any of the branches. Now the policy status of policies being serviced in the cities connected by network are also available through Internet ( Click here to register for these services). In select cities online touch screen kiosks are also provided where you can view your policy status.

Revival Of Lapsed Policies

If your policy has lapsed due to non-payment of premiums within the due date, the terms and conditions of the policy contract are rendered void, till you revive your policy. A lapsed policy has to be revived by payment of the accumulated premiums with interest as well as giving the health requirements as required . ( Click here for knowing more about the revival procedure and the different types of revival allowed) Always keep your policy in force to ensure that your family gets their financial protection assured by your policy. However certain concessions dependent on the term for which you have paid the premiums are available with the exception of some plans for claims concession.( Click here to know the concessions for delayed premium payment and for claims during the lapsed period).

Availing Loans On Policies

Many of our plans are of endowment type and you would be allowed to raise a loan against your policy should you require funds. You repay the loan with interest or continue paying the interest and allow the loan to be deducted at the time of the claim payments. Further loans on policies are also allowed after deduction of earlier out standings ( Click here to find out more about loans on policies). Most financial institutions too allow loans against LIC policies based on the value LIC quotes on request from you.

Surrender Value

This is the value which is the amount payable to you should you decide to discontinue the policy and encash the same from LIC. Surrender value is payable only after three full years premiums are paid to LIC. More over if it is a participating policy the Bonus get attached to it as per prevalent rules. Surrender of policy is not recommended since the surrender value would always be proportionately low. Should you decide to go in for another insurance at this stage further insurance would be available to you at a much higher premium because your age would have advanced since taking out the earlier policy. Therefore retention of earlier policies and continuation of all policies without allowing them to lapse is the best strategy for continuing life insurance protection.

Maturity, Survival Benefits, Disability And Death Claims:

When your Survival Benefits (For Money back policies) or maturity benefits are due, we send intimations to you in advance. However, if the survival benefit amount is less than or equal to Rs.500,000/- the same will be sent to you directly without policy or discharge forms with a few exceptions. If such intimations have not come to you before the due date kindly inform us so that we may take necessary action ( Click here to know about the claims procedure)

Policies Under Salary Savings Scheme

If you have taken your policy under salary Saving Scheme please read the following suggestions :

For each Salary Savings Scheme Policy your employer deducts the premium from your salary and sends a consolidated cheque for all the policies of the employees to a designated Branch of LIC, where all the policy files are maintained.
You can find out which Branch of LIC your policy file will be serviced either from your Agent or from the pay roll department of your employer.
You will need to know which branch of LIC services your policy because you will require their help in getting your Maturity/Survival Benefits, for any alterations like change of address and for availing loans etc.
In case you are in a transferable job please inform the designated Branch of LIC about your new place of posting. After you join your new place of posting please ask your employer the LIC Branch where the premiums are being remitted by your office there and inform the LIC Branch which was servicing you earlier so that your policy files can be transferred.
This way your records will be at correct place and will receive the services from us like maturity, in time. In case you are leaving your employer for a new job or joining another firm, you have the facility to either continue the policy under the Salary Savings Scheme of your new firm or to convert the payment mode into quarterly, half yearly or yearly mode.
Always ensure the continuity of premium payments to avoid frequent revivals of policy. This may become a cumbersome process for a person who is in a transferable job.
Please do not send any installments directly to us. Your premium must come through your employer only. We do not have systems to adjust single installments received from our policy holders. Otherwise please convert the mode into quarterly, halfyearly, or yearly and pay directly. This way you also get a discount on the premium payable.
Leave a permanent local address with us so that we can reach you wherever you are even after many years.

The information contained herein is only to guide you and does not purport to be binding on either party. The contractual implications of your policy will be subject to the terms and conditions of your proposal and the policy document issued to you. They may be also subject to the rules and regulations of the corporation notified from time to time which may be subject to revision and change. The contract will also be subject to the prevailing laws of the country.

To ensure that you get the best out of your policy please read our guidelines carefully.

Keep the policy bond safe. It will be required at the time of maturity or Survival Benefit. You will also require it if you are availing a loan or want to assign ypur policy.
Inform your spouse/Parents/Children as to where the policy is kept.
When you shift residences, please inform the new address to us. Otherwise any communication we send to you, like premium notices, discharge vouchers, etc., will get delayed in reaching you.
Ensure that the nominees name is correctly incorporated in the policy bond.
Remember to pay your premium in time. Due months in which premium is due is given in policy bond.
Check your policy bond and see if your date of birth is correctly given therein.
In case you are handing over the policy bond to any person or office, including the LIC office please take a written acknowledgement.
When your Survival Benefits (For Money back policies) or maturity benefits are due, we send intimations to your three months in advance. If such intimations have not come to your even within one month of the due date kindly inform us so that we may take necessary action.
When in doubt call your agent or the Branch from where you took the policy.

Our Branches are our Operating Units. Hence, for any servicing matter, contact the Servicing Branch of your policy. However, for obtaining general information, you can contact any of the Branches of LIC.

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COMMENTS

Sample Letter to Insurance Company for Loan against Policy
Application for a personal loan against my insurance policy. Dear Sir/Madam, I am presently holding a life insurance policy bearing number ________. The policy is maintained with your branch office, which I had opened on (Date). The policy is for a period of __ years with a fixed sum insured value of (Amount).
Letter for Applying Loan Against Insurance Policy
December 1, 2014. The Divisional Manager, Life Insurance Corporation of India, IT Complex Road, Bengaluru. Sub : Loan against Life Insurance Policy No 99945 for Rs 10,00,000/-. Dear Sir, I got myself insured for life for a sum of Rs 10,00,000/- (Rs Ten Lakh only), vide the said insurance policy in the year 2004.
How to Write a letter to the BM, LIC for a loan against your policy
I have attached all the necessary documents required for processing the loan application. I request you to kindly consider my request and provide me with the loan against my LIC policy at the earliest possible. I am looking forward to your positive response. Thank you for your time and consideration. Yours sincerely, [Your Name] I am writing ...
LIC Policy Loan Options
LIC Policy Loan Options | Official website of Life Insurance ...
LIC Policy Loan Application Form PDF
LIC Loan Application Form PDF download using the link given below. Added on 22 Feb, 2023 by Pradeep (13.233.164.178) REPORT THIS If the purchase / download link of LIC Policy Loan Application Form PDF is not working or you feel any other problem with it, please REPORT IT by selecting the appropriate action such as copyright material / promotion ...
How to take a loan against your LIC policy (Simple Guide)
You can avail of a loan against your policy if you have any of the above policies. That being said, loans are available after the policyholder has completed 1-3 premium paying years. The process to apply for a loan against LIC policy. You can apply for a loan in 2 ways, offline and online. Let us lay down both loan application processes for you.
Life Insurance Policy Loans: Pros and Cons
Pros of a Life Insurance Policy Loan . It doesn't take long to access your loan funds: Getting a life insurance policy loan is quick and easy. Since you are borrowing against your own assets ...
Loan Against LIC Policy
Loan Against LIC Policy: Interest Rate, Eligibility & How ...
All you need to know about Loan against LIC policy
Loan against LIC policy can be a cheaper alternative to personal loans. Do note interest rate is important. 10.5% may be okay. However, if you get a loan at 13-14%, it may be prudent to actually surrender the plan and use the proceeds for your requirement rather than taking out a loan against the same LIC policy.
Loan Against LIC Policies
Loan Against LIC Policies
How to Take A Loan Against LIC Policy?
Kotak Mahindra offers loans against LIC policies to its customers. The loan amount is up to 85% of the surrender value of the policy. The tenure of the loan is up to 15 years. Note that some lenders classify life insurance policy as a security, which is why loan against LIC policy may come under the category "loans against security."
Loan against LIC Policy Online: All You Need to Know
The Loan Against LIC policy is paid out as an overdraft into your HDFC Bank account. You can draw the funds from your account any time you want. The good thing about the loan is that you are liable to pay interest only on the amount you use and for the duration you use it. For example, if you have taken a loan of Rs 2 lakh, and you draw just Rs ...
Loan Against LIC Policy: Interest Rate, Eligibility and How to Apply
The application process for availing of a loan against LIC policies . The process is subject to changes by LIC. Here are the key steps to avail a loan against an LIC policy: 1. Offline method . To avail of a loan against LIC policy, offline, follow these steps: Step 1: Visit the nearest LIC branch office and obtain the loan application form.
PDF Form No. 5196 (Rev) Application for First Loan in Respect of Policies
APPLICATION FOR LOAN AS UNDER WHERE THE POLICY ALREADY BEARS THE ENDORSEMENT OF TERMS AND CONDITIONS OF LOAN OR WHERE THE POLICY HAS BEEN ISSUED ON OR AFTER 1-6-1969. Fresh loan where previous loan is subsisting. Further loan where previous loan granted at 6% or 7 1⁄2 % or 9% is subsisting. The Sr. Divisional Manager, Life Insurance ...
How to Apply for Loan against LIC Policy Online
In an earlier post, I had discussed how you can take loan against your LIC policy to take care of loan requirement.I had also discussed certain aspects as your loan eligibility and the applicable rate of interest for the loan. You can read the various aspects of loan against LIC policy in this post.. In this post, I want to touch upon an operational aspect i.e. how to apply for the loan.
How to Get a Loan Against LIC Policy
How to Get a Loan Against LIC Policy
How to Avail Loan Against Life Insurance Policy
Step 5: Complete the Loan Application. Submit the loan application form, original policy documents, a cancelled cheque, and a payment receipt for the loan amount. The insurance policy will act as collateral for the loan. Also read, Things to Keep in Mind While Applying for a Loan.
Loan against LIC Policy: Benefits, Eligibility And How To Apply
Here's a step-by-step tutorial on how to apply for a loan against LIC policy online: Visit the official website of LIC. Click on LIC to go to the official website. Go to 'Online Loan'. Scroll down and click on 'Online Loan' under the 'Other Online Services' section. Click on 'Online Loan Request'.
Loan Against LIC Policy: From How To Apply To Eligibility Criteria
- If the loan amount exceeds the policy's surrender value, LIC can terminate the policy. - If the insurance policy matures before the loan is fully repaid, LIC can deduct the necessary amount. How To Apply Loan Against LIC Policy: Offline Application Process: - Visit the nearest LIC office. - Complete the necessary forms and follow the ...
Loan Against LIC Policy Calculator, Eligibility, Interest Rates, Documents
LIC's current rate of interest is ranging from 10% to 12% per annum. The loan will be secured itself by your Policy. Life Insurance Corporation charges a very low amount of interest with a friendly nature to pay the principal amount. It makes low interest so you can also go for a personal loan option.
Everything about getting a Loan Against a Life Insurance Policy
The interest rate of personal loans taken from banks is between 12 to 14%. While the interest rate of personal loans availed through a life insurance policy is 10.5% to 12.5%. A loan taken against a life insurance policy is a hassle-free process. It requires minimal documentation and is usually approved instantly.
Loan Against LIC Policy
A loan against an LIC policy is a secured and immediate financial solution where the loan is allowed against the surrender value without surrendering the policy. Generally, a LIC policy acquires the surrender value by paying two to three full-year premiums. You can take loans against LIC policy upto a fixed percentage of the surrender value.
LIC Policy Guidelines For Policy Holders
LIC Policy Guidelines For Policy Holders

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Letter for Applying Loan Against Insurance Policy

Write a letter to a Divisional Manager of LIC and apply for loan against the Life Insurance Policy

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How to Write a letter to the BM, LIC for a loan against your policy

LIC Policy Loan Application Form PDF

LIC Policy Loan Application Form

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LIC Policy Loan Application Form PDF Download Free

LIC Loan Application Form PDF

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Cons of a Life Insurance Policy Loan

Life Insurance Policy Loans: Pros and Cons

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Pros of a Life Insurance Policy Loan

What Does It Mean to Take out a Policy Loan?

What Are the Consequences of a Policy Loan?

Are Policy Loans Repayable?

How Is a Policy Loan Funded?

All you need to know about Loan against LIC policy

How much can I borrow against my LIC plan?

How is the loan repaid? What is the loan tenure?

What is the applicable interest rate?

What If I default on my interest payment?

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What are the benefits of loans against LIC policies?

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Now, you can apply for Loan from LIC and even make loan payments online

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