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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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Descriptive English मतलब Bank Whizz

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]

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Tata Capital > Blog > Loan on Securities > Loan Against LIC Policy: Interest Rate, Eligibility and How to Apply

Loan against lic policy: interest rate, eligibility and how to apply.

Life Insurance Corporation (LIC) policies safeguard you and your loved ones financially during unforeseeable circumstances. But, did you know that LIC policies can also help you get access to loans when required?

A loan against LIC policy is a type of secured loan that facilitates the option to avail of a loan by pledging the policy to the lender. This provision ensures that you do not need to liquidate your hard-earned assets such as property or automobiles to the lender, so you can retain their ownership. However, before you apply for a loan against your LIC policy, understanding how it works is essential.

To help you make an informed financial decision, this article details the nuances and workings of a loan against LIC policy and how it can help you get the finances you need in times of emergencies.

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 take a loan against your LIC policy (Simple Guide)

Are you looking to take a loan against your LIC policy? This article will guide you on how you can do that in simple steps. There are a lot of times where you wish you could take a loan against your existing LIC policy, be it to pay for education expenses, unforeseen medical expenses, or anything else.

Some LIC policies offer their policyholders the flexibility to take a loan against their LIC policy, this could be a massive boon during challenging times for policyholders.

Further, it is also important to know if your LIC policy does offer you this benefit, in case the need arises.

This article will be touching base on the following important topics:

• LIC policies that offer loans

The process to apply for a loan against LIC policy

Required documents, eligibility for availing of a loan, benefits of availing a loan against your lic policy, lic policies that offer loans against a policy.

LIC offers quite a few policies that provide a loan facility. If you have one of the below-mentioned policies, you can avail for a loan by keeping your policy value as collateral. Let us find out which policies are eligible for this benefit:

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.

You can apply for a loan in 2 ways, offline and online. Let us lay down both loan application processes for you.

Online loan application

Step 1: register or log in through lic e-services portal.

If you have not registered on LIC e-services , you can view our LIC registration and LIC login guide. They will show you how you can easily register and log in to your LIC e-services account.

Step 2: Check if your policy is eligible to receive a loan

Step 3: check the interest rate of the loan, step 4: check the available loan amount, step 5: apply for the loan, offline loan application.

You can also visit your nearest LIC branch and apply for a loan. Upon visiting, you can request the office to hand over a loan application form. Kindly fill in the form and attach your KYC details. Once done, hand over the form to the officer. He will get back to you at your registered phone number.

The following documents are required on your part if you wish to apply for a loan:

• Original policy bond
• Aadhar card
• Bank account statement
• Driver’s license
• Duly filled loan application form

The following are the eligibility criteria for availing of a loan with LIC

• The policyholder must be an Indian.
• The policyholder must be over 18 years of age.
• The policyholder must have a running LIC policy.
• The policyholder must have paid policy premium for 1-3 years (certain policies provide a loan if the policyholder has paid the first year’s premium, certain policies require that the policyholder has paid at least 3 years premium)

No credit score: You will not require a credit score to avail a LIC loan. The loan value will simply depend on your policy surrender value. The higher the surrender value, the higher the loan you can avail of.

Comparatively low-interest rates: As LIC is a government organization and majorly exists for the welfare of Indians, the interest rates charged by LIC are comparatively lower compared to private and public sector banks. LIC usually charges a 9%-11% interest rate on their loans.

Fast and easy processing: The loan processing is generally done very quickly as LIC already has all the details that they need with them. Online and offline loan processing will be done swiftly.

Flexible loan repayment: You can repay your loans via flexible bite-sized EMIs.

Loan on 90% of surrender value: You can apply for a loan up to 90% of your policy’s surrender value.

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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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About Aditya Birla Capital

Aditya Birla Capital (‘ the Brand ’) is the single brand for financial services business of Aditya Birla Group. The trade logo “Aditya Birla Capital” and the URL www.adityabirlacapital.com is owned by Aditya Birla Management Corporation Private Limited (trade mark owner) and the same is used herein under the License by Aditya Birla Capital Limited (ABCL) and its subsidiary companies (collectively hereinafter referred to as “ ABC Companies ”).  Aditya Birla Capital Limited is the holding company of all financial services businesses.  

www.adityabirlacapital.com (“the Website ”) is maintained and run by Aditya Birla Financial Shared Services Limited (having its registered office at 18 th Floor, One India bulls Centre, Tower 1, Jupiter Mills Compound, Senapati Bapat Marg, Elphinstone Road, Mumbai- 400013). The information available on www.adityabirlacapital.com relates either to ABCL and/ or ABC Companies under all associated web pages/ sites which are linked to www.adityabirlacapital.com (“hereinafter referred as the Website ”).

All of the ABC Companies have their own separate legal identities and webpages (details about which are embedded in their respective web pages/sites) but in this Website they may sometimes use "Group", "we" or "us" when we refer to ABC Companies in general or where no useful purpose is served by identifying any particular ABCL Affiliate.

Terms and Conditions and Acceptance

Please read these Terms and Conditions (“ Terms of Use ”) carefully. Your Acceptance of the Terms of Use contained herein constitutes the Agreement for the Purpose as defined hereunder. The Acceptance of Terms of Use will be between You and Aditya Birla Financial Shared Services Limited (hereinafter referred as “ Facilities Provider ”) which is facilitating provision of the services, other than those which are otherwise specifically provided by each of the ABC Companies on their respective web pages / sites to you.

By accessing and using this Website you have confirmed that you have read, understood and bound yourself by these Terms of Use. These Terms of Use shall apply to the access and use of the Website and all associated web pages/ sites which are linked with www.adityabirlacapital.com (“ Website ”). You will be subject to the rules, guidelines, policies, terms, and conditions applicable to any facilities that are provided by this Website and all associated web pages/ sites and they shall be deemed to be incorporated into these Terms of Use and shall be considered as part and parcel of these Terms of Use.

In terms of the information Technology Act, 2000 (as amended from time to time), this document is an electronic record.  By accessing the Website and availing for facilities on the Website, the users (hereinafter referred to as " you ", or " your ") agree to be bound by these Terms of Use, the legal disclaimer (‘ Legal Disclaimer ’) and the Privacy Policy (“ Privacy Policy ”), as posted on the Website.

This Agreement describes the terms governing the usage of the facilities provided to you on the Website. Clicking "I Agree" to "Terms & Conditions", shall be considered as your electronic acceptance of this Agreement under Information Technology Act 2000. Your continued usage of the facilities from time to time would also constitute acceptance of the Terms of Use including any updation or modification thereof and you would be bound by this Agreement until this Agreement is terminated as per provisions defined herein.

Your electronic consent, accepting these Terms of Use, represents that you have the capacity to be bound by it, or if you are acting on behalf of any person, that you have the authority to bind such person.

You also acknowledge and agree that, unless specifically provided otherwise, these Terms of Use only apply to this Website and facilities provided on this Website. All of the ABC Companies may have their own individual web pages/sites which are owned by the respective ABC Companies and the facilities offered by the respective ABC Companies will be governed in accordance with the terms and conditions posted of those web pages/websites which you would be bound while availing the facilities/services of the said respective ABC Companies through their respective web pages / sites or otherwise in any other mode as the case may be.

Changes to the Terms of Use

You agree that these Terms of Use may be subject to change/modification for such reason as it may deem fit and proper, including but not limited to comply with changes in law or regulation, correct inaccuracies, omissions, errors or ambiguities, reflect changes in the process flow, scope and nature of the services, company reorganisation, market practice or customer requirements. Upon any change, the updated Terms of Use will be updated on the Website or any other means. Your continued use of the facilities on this Website constitutes acceptance of the changes and an Agreement to be bound by Terms of Use, as amended. You can review the most current version of the Terms of Use at any time, by clicking the Terms & Conditions link on the Website. No fee of whatsoever nature is to be charged for the use of this Website.

If you do not agree with any of these Terms of Use, you may not use this Website.

Authorisation to Facilities Provider

Whenever consent has been obtained/provided by you in any mode under these Terms and Conditions, for availing information/services related to ABC Companies, You agree and authorize the Facilities Provider to share/transfer/transmit your personal information with its ABC Companies and other third parties, in so far as required for offering of facilities through this Website and for analytical / marketing purposes /report generations and/or to offer connected facilities on the Website and may also include transfer/sharing/transmitting  of sensitive personal data or information only if it is deemed necessary for the performance of facilities and to provide you with various value added and ancillary facilities/services and information, to aid you in managing your money needs in the manner agreed under these Terms and Conditions and the privacy policy.  You agree to receive e-mails/SMS/phone calls and such other mode as permitted under law from the Facilities Provider or ABC Companies or its third-party service providers regarding the facilities updates, information/promotional offer and/or new product announcements and such other related information.

You also agree and authorize ABC Companies / its third-party service providers to contact you at the contact information provided for service related communication relating to your product or facilities offered even if your number is in National Do Not Call Registry.

You have the option to withdraw the said consent in the manner specified under these Terms of Use. Please also read the Privacy Policy for more information and details as provided on the Website. The Privacy Policy may be updated from time to time. Changes will be effective upon posting of the revised Privacy Policy on the Website.

One ID at Aditya Birla Capital

You can create a unique ID on the Website for managing and transacting all financial and non financial transactions with ABC Companies. One ID enables you to have a single login ID for viewing and transacting all your product and service needs across ABC Companies. One ABC ID can be created by you on the Website or any of the webpage of ABC Companies (Account.ABC.com sign up page.) by using your e-mail Id and login credentials as registered with the respective ABC Companies while availing the products / services and completing the authentication procedure in the manner specified at the time of creation of One ID.

Once you have created ONE ID you can link and view all your financial products held with ABC Companies on single web page through verification / authentication procedure as applicable to your account/financial products held with the respective ABC Companies.  

You may choose not to create One ID in which case you will not be able to display all your products across ABC Companies on one page. In circumstances like duplicate email id/phone number you may not be able to create the One ID. In such circumstances you must contact the ABCL Affiliate with whom you have held the product/availed the services to enable update the email id/phone number.

 In case you forget the username or password, you can reset the same using the forgot username and password link available on the Website and completing the authentication procedure specified on the Website.    

MoneyForLife Planner

To help you for your money needs you can avail the facility of MoneyForLife Planner ( ‘MoneyForLife Planner/ Planner ’). MoneyForLife Planner facility is powered by Aditya Birla Money Limited, a subsidiary of ABCL. MoneyForLife Planner provides an indicative assessment of your money needs based on the factors like income, age, family members and their future, your future money requirements and current lifestyle status as per details filled in by you on the online questionnaire. The Planner provides an indicative view about the generic investment opportunities available in the manner indicated by you. The results provided by the Planner are generic in nature and do not necessarily reflect the actual investment profile that you may hold and it is not necessary for you to act on it. The Planner provides a generic indication of your money needs to enable you to prioritize your investment needs which are rule based. Therefore, the search results displayed by the Planner cannot be construed to be entirely accurate / comprehensive.

No fee or consideration or economic benefit either directly or indirectly is associated for availing the assessment through MoneyForLife Planner and therefore it is not to be considered as an investment advice or financial planning and / or investment advisory services.

You agree and understand that use of MoneyForLife Planner does not assure attainment of your investment objectives and there is no assurance that the money objectives will be achieved, as the same is subject to performance of the securities, the forces affecting the securities market and your risk profile. You are advised to consult an investment advisor in case you would like to undertake financial planning and / or investment advice for meeting your investment requirements.

You also agree that risks associated with any investment would be entirely yours and you would not hold ABCL and/or ABC Companies or any of its employees liable for any losses that may arise on account of any investments under taken basis the use of MoneyForLife Planner.

All investment decisions shall be taken by you in your sole discretion. You are advised to read the respective offer documents carefully for more details on risk factors, terms and conditions before making any investment decision in any scheme or products or securities or loan product. All investments in any product / fund / securities etc. will be on the basis, subject to and as per the terms and conditions of the specific product’s / fund’s / security’s offer document, key information memorandum, risk disclosure document, product or sales brochure or any other related documents which are offered by the respective issuer of such product/securities. You can use execution platform/services with any third party as deem fit and proper, and there is no compulsion to use the execution services through this Website.

Not an Investment Advisor, Planner, Broker or Tax Advisor

The facilities on the Website are not intended to provide any legal, tax or financial or securities related advice. You agree and understand that the Website is not and shall never be construed as a financial planner, financial intermediary, investment advisor, broker or tax advisor. The facilities are intended only to assist you in your money needs and decision-making and is broad and general in scope. Your personal financial situation is unique, and any information and advice obtained through the facilities may not be appropriate for your situation. Accordingly, before making any final decisions or implementing any financial strategy, you should consider obtaining additional information and advice from your advisor or other financial advisers who are fully aware of your individual circumstances. For more details, please also refer to the Legal Disclaimers provided on the Website.

Financial Solutions

We may provide you with various money solutions and options which are generally available basis your investment profile or those which are generally held by persons of similar investment profile. You authorize us to use/disseminate the information to provide the Financial Solutions however it is not necessarily for you to act on it. It only serves an indicative use of information which you may execute in the manner agreed by you.

Password Protection

You shall not be entitled to avail the facilities without the use of a user name and password. You are responsible for maintaining the confidentiality of your password and Account, and you shall not allow anyone else to use your password at any time. You are fully responsible for all activities that occur using your password or Account. You are requested to please notify www.adityabirlacapital.com immediately of any unauthorized use or access of your password or Account, or any other breach of security. The Website will not be liable for any loss that you may incur as a result of someone else using your password or account, either with or without your knowledge.

Intellectual Property Rights

This Website contains information, materials, including text, images, graphics, videos and sound (“ Materials ”), which is protected by copyright and/or other intellectual property rights. All copyright and other intellectual property rights in these Materials are either owned by ABCL or have been licensed to Facilities Provider, ABCL / ABC Companies by the owner(s) of those rights so that it can use these Materials as part of this Website. Other than those Materials which belong to Third Parties, ABC Companies retains copyright on all Information, including text, graphics and sound and all trademarks displayed on this Website which are either owned by or licensed to by ABCL and/or used under license by ABC Companies.

You shall not (a) copy (whether by printing off onto paper, storing on disk, downloading or in any other way), distribute (including distributing copies), download, display, perform, reproduce, distribute, modify, edit, alter, enhance, broadcast or tamper with in any way or otherwise use any Materials contained in the Website. These restrictions apply in relation to all or part of the Materials on the Website; (b) copy and distribute this information on any other server or modify or re-use text or graphics on this system or another system. No reproduction of any part of the Website may be sold or distributed for commercial gain nor shall it be modified or incorporated in any other work, publication or web site, whether in hard copy or electronic format, including postings to any other web site; (c) remove any copyright, trade mark or other intellectual property notices contained in the original material from any material copied or printed off from the web site; link to this Website; without our express written consent.

No Warranty

Although all efforts are made to ensure that information and content provided as part of this Website is correct at the time of inclusion on the Website, however there is no guarantee to the accuracy of the Information. This Website makes no representations or warranties as to the fairness, completeness or accuracy of Information. There is no commitment to update or correct any information that appears on the Internet or on this Website. Information is supplied upon the condition that the persons receiving the same will make their own determination as to its suitability for their purposes prior to use or in connection with the making of any decision. Any use of this Website or the information is at your own risk. Neither ABCL and ABC Companies, nor their officers, employees or agents shall be liable for any loss, damage or expense arising out of any access to, use of, or reliance upon, this Website or the information, or any website linked to this Website.

No Liability

This Website is provided to you on an "as is" and "where-is" basis, without any warranty. ABCL, for itself and any ABC Companies and third party providing information, Materials (defined later), facilities, or content to this Website, makes no representations or warranties, either express, implied, statutory or otherwise of merchantability, fitness for a particular purpose, or non-infringement of third party rights, with respect to the website, the information or any products or facilities to which the information refers. ABCL will not be liable to you or any third party for any damages of any kind, including but not limited to, direct, indirect, incidental, consequential or punitive damages, arising from or connected with the site, including but not limited to, your use of this site or your inability to use the site, even if ABCL has previously been advised of the possibility of such damages. Any access to information hosted on third party websites of billers/banks/merchants/ABC Companies etc. is not intended and shall not be treated as an offer to sell or the solicitation of an offer to buy any product/offering of these ABC Companies or third parties.

The Facilities Provider or ABCL or ABC Companies shall have absolutely no liability in connection with the information and Material posted on this Website including any liability for damage to your computer hardware, data, information, materials, or business resulting from the information and/or Material or the lack of information and/or Material available on the Website. In no event shall ABCL or ABC Companies shall be liable for any for any special, incidental, consequential, exemplary or punitive damages for any loss, arising out of or in connection with (a) the use, misuse or the inability to use this Website; (b) unauthorized access to or alteration of your transmissions or data; (c) statements or conduct of any third party on the site; or (d) any other matter whatever nature relating to this Website.

Further, the Facilities Provider cannot always foresee or anticipate technical or other difficulties. The facilities may contain errors, bugs, or other problems. These difficulties may result in loss of data, personalization settings or other facilities interruptions. The Website does not assume responsibility for the timeliness, deletion, mis-delivery, or failure to store any user data, communications, or personalization settings.

The Facilities Provider, ABCL, ABC Companies and the providers of information shall not be liable, at any time, for any failure of performance, error, omission, interruption, deletion, defect, delay in operation or transmission, computer virus, communications line failure, theft or destruction or unauthorized access to, alteration of, or use of information contained at this Website.

Manner of Use of Personal Information

All Personal Information including Sensitive Personal Information provided/related to you, shall be stored/used/processed/transmitted expressly for the Purpose or facilities indicated thereon at the time of collection and in accordance with the Privacy Policy. Other than those otherwise indicated and agreed by You, this Website do not collect or store or share your Personal Information. Aditya Birla Capital is the brand and accordingly all products and facilities are provided by respective ABC Companies as applicable. Therefore, for any of these Purposes, the Website will use ABC Companies their authorized third party vendors, agents, contractors, consultants or facilities providers (individually a ‘ Third Party Service Provider ’ and collectively, the “ Third Party Service Providers ”) and to that extent you understand and authorize the Facilities Provider to share/transmit such information to Third Party Service Providers. Such sharing of information will be solely for the purpose to fulfill / complete / authenticate your specific requests/transaction execution and for providing information about any ABC Companies product or facilities or services or for data analytics or to deliver to you any administrative notices, alerts or communications relevant to your Purpose (and which may include sending promotional emails or SMS or calls or any other mode permitted under law) or to analyze the usage and improve the facilities/solutions offered or for any research or troubleshooting problems, detecting and protecting against errors or to improve features, tailor the facilities on the Website to your interests, and to get in touch with you whenever necessary.

Except in the manner as stated in the Privacy Policy, the Website will not disclose your Personal Information with any affiliated or unaffiliated third parties,

You may receive e-mails /communications/notifications from the Third Party Services Providers regarding facilities updates, information/promotional e-mails/SMS and/or update on new product announcements/services in such mode as permitted under law.

Use of Website in India

This Website is controlled and operated from India and there is no representation that the Materials/information are appropriate or will be available for use in other locations. If you use this Website from outside the India, you are entirely responsible for compliance with all applicable local laws. There is no warranty or representation that a user in one region may obtain the facilities of this website in another region.

Information published on the Website may contain references or cross references to products, programs and facilities offered by ABC Companies/third parties that are not announced or available in your country. Such references do not imply that it is intended to announce such products, programs or facilities in your country. You may consult your local advisors for information regarding the products, programs and services that may be available to you.

In your use of the Website, you may enter correspondence with, purchase goods and/or facilities from, or participate in promotions of advertisers or members or sponsors of the web site, including those of ABC Companies. Unless otherwise stated, any such correspondence, advertisement, purchase or promotion, including the delivery of and the payment for goods and/or facilities, and any other term, condition, warranty or representation associated with such correspondence, purchase or promotion, is solely between you and the applicable ABC Companies and/or third parties.

You agree that Facilities Provider / ABC Companies has no liability, obligation or responsibility for any such correspondence, purchase or promotion between you and any other ABC Companies and/or third parties.

Third party websites

This Website may be linked to other websites (including those of ABC Companies) on the World Wide Web that are not under the control of or maintained by ABCL. Such links do not indicate any responsibility or endorsement on our part for the external website concerned, its contents or the links displayed on it. These links are provided only as a convenience, in order to help you find relevant websites, facilities and/or products that may be of interest to you, quickly and easily. It is your responsibility to decide whether any facilities and/or products available through any of these websites are suitable for your purposes. The Facilities Provider or ABCL is not responsible for the owners or operators of these websites or for any goods or facilities they supply or for the content of their websites and does not give or enter into any conditions, warranties or other terms or representations in relation to any of these or accept any liability in relation to any of these (including any liability arising out of any claim that the content of any external web site to which this web site includes a link infringes the intellectual property rights of any third party).

In case any facilities/services, access/dissemination of information or execution of transaction is done through use of any APP related to ABC Companies, the additional terms and conditions governing the Use of APP shall be applicable and to be read along these Terms of Use.

Postings and monitoring

The Facilities Provider or ABCL or ABC Companies does not routinely monitor your postings to the Website but reserves the right to do so if deemed necessary if it is related to the facilities offered on the web site and to comply with law. However, in our efforts to promote good citizenship within the internet community, if the Facilities Provider or ABCL or ABC Companies becomes aware of inappropriate use of the Website or any of its facilities, any information, opinions, advice or offers posted by any person or entity logged in to the Website or any of its associated sites is to be construed as public conversation only, and the Facilities Provider or ABC Companies shall not be liable or responsible for such public conversation. You agree that in such cases, we will respond in any way that, in our sole discretion, as deemed appropriate. You acknowledge that Facilities Provider or ABC Companies will have the right to report to law enforcement authorities any actions that may be considered illegal, as well as any information it receives of such illegal conduct. When requested, ABC Companies/Facilities Provider will co-operate fully with law enforcement agencies in any investigation of alleged illegal activity on the internet.

Submissions and unauthorized use of any Materials contained on this Website may violate copyright laws, trademark laws, the laws of privacy and publicity, certain communications statutes and regulations and other applicable laws and regulations. You alone are responsible for your actions or the actions of any person using your user name and/or password. As such, you shall indemnify and hold Facilities Provider, ABCL / ABC Companies and its officers, directors, employees, affiliates, agents, licensors, and business partners harmless from and against any and all loss, costs, damages, liabilities, and expenses (including attorneys' fees) incurred in relation to, arising from, or for the purpose of avoiding, any claim or demand from a third party that your use of the Website or the use of the Website by any person using your user name and/or password (including without limitation your participation in the posting areas or your submissions) violates any applicable law or regulation, or the rights of any third party.

We reserve the right to terminate access to this Website at any time and without notice. Further this limited license terminates automatically, without notice to you, if you breach any of these Terms of Use. Upon termination, you must immediately destroy any downloaded and printed Materials.

If you come across any breaches/violation or offensive material you must report to us at  [email protected]

Use of Cookies

You agree and understand that the Website will automatically receive and collect certain anonymous information in standard usage logs through the Web server, including computer/computer resource-identification information obtained from "cookies" sent to your browser from a web server or other means as explained in the Privacy Policy.  

Facilities Changes and Discontinuation

The Website reserves the right to discontinue or suspend, temporarily or permanently, the facilities. You agree that the Facilities Provider/ ABC Companies will not be liable to you in any manner whatsoever for any modification or discontinuance of the facilities. The format and content of this Website may change at any time. We may suspend the operation of this Website for support or maintenance work, in order to update the content or for any other reason.

ABCL, ABC Companies, and its directors, employees, associates, or other representatives shall not be liable for any damages or injury, arising out of or in connection with the use, or non-use including non-availability of the Website and also for any consequential loss or any damages caused because of non-performance of the system due to a computer virus, system failure, corruption of data, delay in operation or transmission, communication line failure, or any other reason whatsoever. The Website will not be responsible for any liability arising out of delay in providing any information on the Website.

Compliance with the Law

You agree that you will not:

• Use any robot, spider, scraper, deep link or other similar automated data gathering or extraction tools, programme, algorithm or methodology to access, acquire, copy or monitor the Website, or any portion of the Website.
• Use or attempt to use any engine, software, tool, agent, or other device or mechanism (including without limitation, browsers, spiders, robots, avatars or intelligent agents) to navigate or search the Website, other than the search engines generally available by third party web browsers
• Post or transmit any file which contains viruses, worms, Trojan horses or any other contaminating or destructive features, or that otherwise interferes with the proper working of the Website or the facilities.
• Attempt to decipher, decompile, disassemble, or reverse engineer any of the software, comprising or in any way making up a part of the Website or the facilities.
• You agree not to use the facilities for illegal purposes or for the transmission of material that is unlawful, harassing, libelous (untrue and damaging to others), invasive of another's privacy, abusive, threatening, or obscene, or that infringes the rights of others.

Restrictions on Commercial Use or Resale

Your right to use the facilities is personal to you; therefore, you agree not to resell or make any commercial use of the facilities. In addition, the Website welcomes your feedback as a user of the facilities. Any feedback you provide will become the confidential and proprietary information of the Website, and you agree that the Website may use in any manner and without limitation, all comments, suggestions, complaints, and other feedback you provide relating to the Website. The Website shall have a worldwide, royalty-free, non-exclusive, perpetual, and irrevocable right to use feedback for any purpose, including but not limited to incorporation of such feedback into the Website or other Website software or facilities.

No Endorsements

All product and facilities marks contained on or associated with the facilities that are not the Website marks are the trademarks of their respective owners. The Website would require you to respect the same. References to any such names, marks, products or facilities of third parties or hypertext links to third party sites or information does not imply the Website’s endorsement, sponsorship or recommendation of the third party, information, product or facilities.

Promotional Offers

You may receive from time to time, announcement about offers with intent to promote this Website and/or facilities/products of ABC Companies (“ Promotional Offers ”). The Promotional Offer(s) would always be governed by these Terms of Use plus certain additional terms and conditions, if any prescribed. The said additional terms and conditions, if prescribed, would be specific to the corresponding Promotional Offer only and shall prevail over these Terms of Use, to the extent they may be in conflict with these Terms of Use. The Website reserves the right to withdraw, discontinue, modify, extend and suspend the Promotional Offer(s) and the terms governing it, at its sole discretion.

Charges for use of Website

There are no charges or fees to be paid by you for use of this Website. However, you are responsible for all telephone access fees and/or internet service fees that may be assessed by your telephone and/or internet service provider. You further agree to pay additional charges, if any levied by Third Party Service Provider(s), for the facilities provided by them through the Website (Additional Charges).

No Endorsement

You are advised to be cautious when browsing on the internet and to use good judgment and discretion when obtaining information or transmitting information. From this Website, users may visit or be directed to third party web sites. The Website makes no effort to review the content of these web sites, nor is the Website or its licensors responsible for the validity, legality, copyright compliance, or decency of the content contained in these sites.

In addition, the Website does not endorse or control the content of any other user and is not responsible or liable for any content, even though it could be unlawful, harassing, libelous, privacy invading, abusive, threatening, harmful, vulgar, obscene or otherwise objectionable, or that it infringes or may infringe upon the intellectual property or other rights of another. You acknowledge that the Website does not pre-screen content, but that the Website will have the right (but not the obligation) in their sole discretion to refuse, edit, move or remove any content that is available via the facilities.

Electronic Communications

These Terms of Use and any notices or other communications regarding the Facilities may be provided to you electronically, and you agree to receive communications from the Website in electronic form. Electronic communications may be posted on the Website and/or delivered to your registered email address, mobile phones etc either by Facilities Provider or ABC Companies with whom the services are availed. All communications in electronic format will be considered to be in "writing". Your consent to receive communications electronically is valid until you revoke your consent by notifying of your decision to do so. If you revoke your consent to receive communications electronically, the Facilities Provider shall have the right to terminate the facilities.

You shall not assign your rights and obligations under this Agreement to any other party. The Website may assign or delegate its rights and/or obligations under this Agreement to any other party in future, directly or indirectly, or to an affiliated or group company.

Legal Disclaimers

The information provided on or through the Website is for general guidance and information purposes only and they do not in any manner indicate any assurance or opinion of any manner whatsoever. Any information may be prone to shortcomings, defects or inaccuracies due to technical reasons. Certain information on Website may be on the basis of our own appraisal of the applicable facts, law and regulations in force at the date hereof.

The information (and opinions, if any) contained on the Website may have been obtained from public sources believed to be reliable and numerous factors may affect the information provided, which may or may not have been taken into account. The information provided may therefore vary (significantly) from information obtained from other sources or other market participants. Any reference to past performance in the information should not be taken as an indication of future performance. The information is dependent on various assumptions, individual preferences and other factors and thus, results or analyses cannot be construed to be entirely accurate and may not be suitable for all categories of users. Hence, they should not be solely relied on when making investment decisions. Your investment or financial decision shall always be at your own discretion and based on your independent research; and nothing contained on the Website or in any information would construe ABCL/ABC Companies or any of its employees/authorized representative as having been in any way involved in your decision making process. Any information and commentaries provided on the Website are not meant to be an endorsement or offering of any stock or investment advice.

Nothing contained herein is to be construed as a recommendation to use any product, process, equipment or formulation, in conflict with any patent, or otherwise and Facilities Provider / ABCL/ABC Companies makes no representation or warranty, express or implied that, the use thereof will not infringe any patent, or otherwise. Information on this Website sourced from experts or third party service providers, which may also include reference to any ABCL Affiliate. However, any such information shall not be construed to represent that they belong or represent or are endorsed by the views of the Facilities Provider or ABC Companies. Any information provided or sourced from ABCL Affiliate belongs to them. ABCL is an independent entity and such information from any ABCL Affiliate are not in any manner intended or to be construed as being endorsed by ABCL or Facilities Provider. The information does not constitute investment or financial advice or advice to buy or sell, or to endorse or solicitation to buy or sell any securities or other financial instrument for any reason whatsoever. Nothing on the Website or information is intended to constitute legal, tax or investment advice, or an opinion regarding the appropriateness of any investment or a solicitation of any type. Investment in the securities market and any financial instruments are inherently risky and you shall always assume complete and full responsibility for the outcomes of all the financial or investment decisions that you make, including but not limited to loss of capital. You are therefore advised to obtain your own applicable legal, accounting, tax or other professional advice or facilities before taking or considering an investment or financial decision.

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No Information at this Website shall constitute an invitation to invest in ABCL or any ABC Companies. These are meant for general information only or to meet statutory requirements or disclosures. ABCL or any of its employees are in no way liable for the use of the information by you, when making any decision or investing or trading through any investment vehicles or ABC Companies, or any other third party which may be engaged in offering of these services.

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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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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!

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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

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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 )

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.

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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Two recent tax changes that may affect your decision to invest in nps, 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?

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• Personal Loan
• Loan Against LIC Policy

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. There are different kinds of policies that give this benefit- Term insurance plans, endowment, money back, whole life, or Unit Linked Insurance Plans.

Term insurance policies pay the sum insured only in the event of death. On the other hand, endowment policies/money back policies or Whole Life policies make payments to the insured on surviving a certain number of years or on maturity.

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.

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.

What is a Loan Against LIC Policy?

A loan is a 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 Kind of LIC Policy Can Be Used for Availing a Loan?

As explained earlier, Life insurance policies can either be term policies or policies with a surrender value. However, only endowment or money-back policies are allowed to be given as collateral/security against a loan. 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 .he 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.

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

What is the Interest Charged on a Loan Against the Insurance Policy?

The Life Insurance Corporation of India charges an interest rate in the range of 9-10% depending upon the insurance plan. While banks charge in the range of 10-15% for a loan against an insurance policy. But many of the banks offer loans/overdrafts against LIC/other insurance policies only to their account holders.

How to Avail of a Loan Against a LIC Policy?

There are two ways of availing a loan against a LIC/Insurance Policy. Both online and offline channels can be used to get a loan depending upon the one which you are comfortable with.

Online Way of Getting a Loan Against LIC Policy

The online way of getting a loan against an insurance policy is available only with the insurance companies. LIC offers an option to its subscribers to apply for a loan on its online portal.

The process is fairly simple which is described as below

• Register yourself on LIC portal .
• Go to the tab of Online Services
• Click on the Online Loan option
• This takes you to the Online Policy Options where you can place a request for a loan under the Online Loan Request Tab.
• After placing the request, you may need to upload your KYC documents for verification

The screens for the steps are given below for your convenience

Getting a Loan By Offline Method

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

• 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.
• Sign the required application form and get the particulars of the loan like the interest charged, tenure of the loan, etc
• Finally, you get the loan in a lump sum or as an overdraft

What is the Amount of Loan that is Available Against the Insurance Policy?

The amount admissible as a loan against the insurance policy is in the range of 70-90% of the surrender value of the policy.

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 principal in due course
• Pay the interest and 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 a LIC policy are:

• The loan against a LIC policy comes at a cheaper rate than a personal loan (10% onwards) or a credit card interest rate (36-48%).
• Like a personal loan, loan availed against a LIC policy can be used for any purpose according to your needs
• Availing a loan against a LIC/Insurance policy would not require a credit score. This can come across as one of the greatest advantages for an individual with a bad credit score
• The life cover on the policy will continue in spite of availing the loan. In case of death of the insured (borrower) then 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 obtained from the insurer.
• Due to various kinds of repayment available, a lesser financial burden is created on availing this loan
• A loan can be availed only after the policy accumulates a certain surrender value, which means during the initial years of the policy it would be difficult to avail a loan against the policy.

While availing of a loan against a 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.

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Loan Against LIC Policy

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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:

* 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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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.

Easily Organize, Claim and Renew Insurance!

How to get a Loan against LIC policy?

The Life Insurance Corporation of India (LIC) is one of the leading life insurance companies in the insurance market. The company was formed in the year 1956, making it the oldest life insurance company in India. Being the oldest company, LIC has a huge customer base and a large market share.

LIC India offers comprehensive insurance plans for its customers. It has a range of policies for the varying needs of its customer base. You can find detailed reviews and browse some of LIC’s best insurance plans in India here.

Table of Contents

• What is LIC loan on the policy?
• Features of LIC loan

Which plans offer LIC loan?

Lic loans under endowment assurance plans, lic loans under whole life plans, lic loans under money back plans, pros and cons of loan on lic policy, who can apply for lic loan, documents required for lic loans.

• Important things to remember about LIC loans

How to get a loan against LIC policy?

• Benefits of LIC loan vis-à-vis other loans

LIC offers a range of life insurance plans for its customers. You can find term plans, endowment plans, money back plans, child plans, unit-linked plans, pension plans and even health insurance plans in LIC’s kitty. These plans provide unmatched coverage benefits at affordable premium rates.

Moreover, many life insurance plans offered by LIC also offers policy loans. Do you know about the loan against LIC policies?

What is a Loan against LIC policy?

Under traditional savings oriented life insurance plans you have the option of availing a loan against LIC policy. This LIC loan is available against the surrender value of the plan. The loan is like a personal loan which you can use for any personal or commercial financial needs that you have.

Features of LIC loan:

Availing a loan against LIC policy has various important aspects which you should know. These aspects include the following-

• LIC loan is available after the plan completes a specified tenure. This tenure can be one to three years depending on the mode of premium payment. Moreover, the full premiums should be paid during this tenure
• The loan is calculated on the surrender value of the policy. The maximum loan which you can avail depends on the terms and conditions prescribed by LIC from time to time
• Interest would be payable on the amount of loan that you avail. The LIC policy loan interest rate is not fixed. LIC interest rate on the policy is fixed by LIC from time to time
• You have to repay the loan within the duration of the policy. If the loan is not repaid and the policy matures, the outstanding loan amount would be deducted from the maturity benefit. Similarly, in the case of death, the death benefit would be paid after deducting the loan amount

As stated earlier, traditional savings plans offer LIC loan. These plans can be endowment plan, money back plans or child plans. Here is a list of plans which offer a loan on LIC policy and the period after which you can avail the LIC loan –

Endowment plans offer you the option of raising a secured financial corpus. If you want to browse more endowment plans, you can click here.

Money back policy is a traditional policy gives you life protection along with savings, this plan provides you periodic payments during the policy tenure. Click the link below to know more.

Though LIC policies offer loans, there are both advantages and disadvantages of availing such loans. Let’s understand what these advantages and disadvantages are –

Advantages of LIC loan

• The loan process is very easy and convenient. You can avail LIC loan online through some clicks of your mouse
• The loan is a multipurpose loan which can be used for any financial need that you have
• Since LIC policies can be taken for longer durations, you get a longer repayment period to pay off the loan affordably
• The LIC loan interest rate is low compared to other personal loans available in the market and ranges from 9-11%
• There is no processing fee involved when you apply for LIC loans
• You can pay the loan as per your convenience. There is no EMI repayment option. The loan can be paid in instalments at any time during the policy period.

Disadvantages of LIC Loan

• If you fail to repay your loan, the policy would be terminated by the life insurance company . As such, you would lose the coverage benefits under the plan
• Since the loan is offered against the surrender value of your policy, the loan amount would be limited. It might not prove sufficient to cover your financial requirements
• If you have availed a loan on LIC policy, the same policy cannot be used as collateral for availing other loans
• The maturity and death benefit is greatly reduced if you do not repay the loan and the outstanding amount is deducted from them. Such low values hamper wealth creation

You should, therefore, understand the pros and cons of LIC loans before availing them.

You can apply for LIC loans if you meet the following eligibility criteria –

• You are aged 18 years and above
• You are the policyholder and own a LIC policy
• The policy that you own allows loan facilities
• The policy has acquired a surrender value against which you can get the loan

You would have to submit the following documents to avail LIC loans –

• Your policy bond in original
• An application for availing a loan on LIC policy
• An assignment deed through which you assign the loan in the name of LIC
• Your identity proof
• Your address proof
• Your income proof

4 Important things to remember about LIC loans

Here are some important things regarding a loan on LIC policy that you should keep in mind –

• The maximum amount of loan which is available is limited to 90% of the policy’s surrender value
• If the policy is in a paid-up state where premiums are not being paid any more, the maximum loan that you can avail would be limited to up to 85% of the surrender value
• LIC loan interest would have to be paid half-yearly
• The minimum loan tenure is six months. Even if you repay the loan within six months, interest for six months would be charged by LIC

You can apply for LIC loan in the following two ways –

• Offline Process: By approaching the nearest branch of LIC and filling out a loan application form. You would then have to submit the form with other loan-related documents and request for LIC loan
• Online Process: You can apply for LIC loan online if you are a registered user and have registered for premium services. The process for an online loan application is as follows –
• Visit the home page of LIC’s website and choose ‘Online Loan’
• You would be taken to a new page wherein you can request online LIC loan by clicking ‘Through customer portal’
• Provide your user ID, password and date of birth in DD/MM/YYYY format to proceed
• Once you log into your LIC account, choose the policy on which you want LIC loan
• Make a loan request and the request would be processed

Loan against LIC policy offers the policyholders an assurance of help during emergencies. This provides further benefits apart from traditional policy coverage. Get these advantages by purchasing life insurance plans for yourself and your loved ones from LIC below.

If you have not registered for premium online services, here are the steps how you can do so –

• Log into your online LIC account using your user ID and password
• Fill up the registration form for premium services. Your date of birth, mobile number and email ID would be auto-filled. You would have to enter your PAN Card number or passport details
• Then you can see your LIC policies
• Choose the policies on which you want to activate premium services
• After the form is filled, save the form and print out a copy
• Sign the form
• Scan the form along with any of your KYC documents in the format of .bmg, .jpeg, .tiff, .bmp, .gif, .png image
• Upload the image of the registration form and the scanned copy of your KYC document and PAN card or passport
• Click ‘Submit’
• You would then get an acknowledgement email as well as an SMS stating that your request has been accepted
• The company would verify the form and your uploaded documents and send an acknowledgement stating the activation of premium services.

Once you are registered for premium services you can apply for LIC loans. Moreover, besides applying for LIC loan, you can also pay the loan online and check LIC loan status online on your LIC account.

Top #6 Benefits of LIC loan vis-à-vis other loans:

Loan against LIC policy has various benefits over other types of loans. These benefits include the following:

• No processing fee
• No hidden charges
• Easy application process
• Longer repayment periods
• Low-interest rates
• No requirement of your credit score

Loan against LIC is a good way to avail funds from your life insurance plans if you face a financial crunch. You would get the loan easily and the repayment process is also flexible. With low-interest rates, LIC loans are a good option which does not tax your finances.

Taking these factors into consideration, LIC policies can be an attractive insurance option. You can compare them with ease by clicking on this link.

LIC insurance plans offer this extra advantage of availing a loan against LIC policy for the insurance holders. Therefore, getting a life insurance plan from LIC can offer a secure future along with the convenience of borrowing a loan.

Turtlemint can help you choose the best LIC policy according to your needs and eligibility. Check the best policy for your profile and buy it today to protect yourself and your family.

FAQ’s:

• What is the maximum loan which can be taken?

You can avail a maximum loan of up to 90% of the policy’s surrender value. This limit reduces to 85% of your policy is paid-up.

2. What would happen if the loan is not repaid?

If the loan is not repaid, the amount is deducted from the maturity or death benefit when they are paid. However, if the loan is not repaid and the outstanding loan plus the interest amount exceed the surrender value, LIC would foreclose the policy.

3. What happens when the policy is foreclosed?

If your loan liability exceeds the surrender value, LIC would send a notice to you asking for repayment of a part of the loan. If you pay the loan partially, the outstanding liability reduces and the policy continues. However, if you are unable to make any payment towards the loan, LIC would foreclose the coverage. Foreclosure means termination of the plan. The coverage benefit would stop and you would get the remaining surrender value after the outstanding loan is deducted from it.

4. Can loan interest rates change?

Yes, the LIC interest rate on policy might change any time as per the discretion of the company.

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Policy cancellation and refund of the premium shall be as per the terms & conditions of the policy. The refunds are processed by the Insurance Company directly. You are requested to contact the toll free number of your Insurance Company or refer the respective section of your Policy terms and conditions. You can also call us at our toll free number 1800-266-0101 or write a mail to us at [email protected] . We shall be available to guide/assist you.

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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.

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Claims Under Regular Life Insurance Policies 01. Death Claims: The person legally entitled to receive the policy monies should give intimation of death of the policyholder to the servicing Branch. The requirement for the claim are as given below:

• Claim Form 'A' in Form No.3783. If policy has run for 3 years or more from date or risk, claim form no.3783A may be used.
• Certified extract from death register.
• The original policy document with Deed/s of assignment/s, if any. (Additional requirement may be required under a policy according to the status of the policy. Please contact our servicing Branch for details).

02. Maturity Claims:

• It is our endeavour to settle your maturity claim on or before the due date. The servicing Branch usually sends maturity claim intimations two months in advance.
• Please submit your Discharged Receipt in Form No.3825 with original policy document atleast one month before the due date so that the payment is received before the due date of maturity claim.
• If you have not received any intimation for your claim due in the next two months, please contact the servicing Branch immediately.

03. Survival Benefit Claims forms:

04. Revival Forms

Revival of Lapsed Policy- Form no. 680

Revival of Lapsed policy - Form no. 700

Revival of lapsed Policy- Form no. 720

09. Health Insurance Forms Click here to download

10. Pre-contract Integrity Pact

11. Forms required for issuance of duplicate policy

12. Self Certification form for FATCA and CRS

13. P&GS Claims Related forms

14. Annuity Claim forms

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