Repayment Strategies and Loan Duration Information
In times of short-term financial needs, borrowing against your Life Insurance Corporation (LIC) policy can provide a viable solution without impacting your long-term insurance plan. This secured loan, offered by LIC or authorised lenders, uses your life insurance policy as collateral.
To be eligible for such a loan, you must meet certain criteria. As an Indian citizen, you must be at least 18 years old. Your LIC policy must have a guaranteed surrender value and you should have paid premiums for at least three years. The policy should be an eligible type, typically endowment or money-back policies.
The process of applying for a loan against your LIC policy involves several steps. First, you need to determine your policy's surrender value through an LIC agent, policy document, or online portal. Next, you'll complete the loan application form on the LIC website or the lender’s platform.
Providing essential documents is crucial in this process. These include your Aadhaar card or passport as ID proof, the policy bond or policy document, utility bills or bank statements as address proof, and a cancelled cheque for loan disbursement. In some cases, you may be required to sign forms to assign your policy to the lender during the loan period.
The loan amount is usually up to 80% of the policy's surrender value. Interest rates for these loans can vary based on whether one borrows directly from LIC or through a financial institution. It's important to note that the policy continues to offer life cover as long as premiums and loan dues are paid.
Applying for a loan against an insurance policy requires careful consideration and adherence to the set criteria by LIC or the lending institution. Some lenders may require you to assign the policy in their favour during the loan period.
A loan against a LIC policy can be a helpful financial tool in addressing short-term needs. With the convenience of online applications and loan calculators to estimate eligible loan amounts and interest payouts, accessing this secured loan is now more straightforward than ever.
With the convenience of online applications and loan calculators, individuals can now quickly assess their eligibility for a loan against their Life Insurance Corporation (LIC) policy, a viable option for addressing short-term financial needs while simultaneously ensuring the policy's long-term insurance plan remains unaffected. To qualify for this secured loan, applicants must be Indian citizens aged 18 or older with a LIC policy that has a guaranteed surrender value, has received premium payments for at least three years, and is an eligible type, usually an endowment or money-back policy.
