New Delhi: In a move to provide financial assistance to its policyholders, the Life Insurance Corporation of India (LIC) introduces the option of availing loans against policies. This initiative aims to offer a convenient solution for individuals facing challenges in securing loans from traditional banking channels.
What Is Loan Against LIC Policy?
Taking a loan against an LIC policy is a straightforward process. This means policyholders can obtain a loan by using their LIC policy as collateral. (Also Read: Want To Restart Your Inactive Savings Account In Post Office? Here’s How)
It’s especially beneficial for those with lower credit scores or difficulty obtaining loans from banks. It’s essential to note that besides LIC, there are other lenders who also provide loans against life insurance policies. (Also Read: Latest FD Rates 2023: BoB vs BOI vs SBI Fixed Deposit Interest Rates Compared)
Loan Against LIC Policy: Eligibility Criteria
– Minimum age requirement: 18 years
– Must have a valid LIC policy
– The LIC policy should have a guaranteed surrender value.
– The applicant must have paid at least three years of LIC premium in full.
Features Of Loans Against LIC Policy:
– The interest rate depends on the applicant’s profile, and only LIC endowment policyholders can avail of the loan.
– The loan amount is an advance on the policy’s surrender value.
– LIC considers the insurance policy as collateral, enabling them to withhold the loan in case of default.
– Not all LIC policies offer the option of obtaining a loan.
– If the loan amount exceeds the policy’s surrender value, LIC can terminate the policy.
– If the insurance policy matures before the loan is fully repaid, LIC can deduct the necessary amount.
How To Apply Loan Against LIC Policy:
Offline Application Process:
– Visit the nearest LIC office.
– Complete the necessary forms and follow the application process.
– Submit required documents along with the original policy document.
– Upon verification, an amount up to 90 percent of the policy’s surrender value will be disbursed.
– Register for LIC e-Services.
– Log in to your account to verify policy eligibility.
– Review loan terms, conditions, interest rates, and other features.
– Apply online, upload KYC documents, or send them to a LIC office for processing.