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How to get loan against your LIC policy: The country's well-known insurance company Life Insurance Corporation of India (LIC) has crores of policyholders. Which offers many types of plans to its customers. Many times in life people suddenly need money, in such emergency times you can easily take a loan against your LIC policy. You can also get a personal loan against the surrender value of your LIC policy.
Loan can be obtained by mortgaging the policy
Your life insurance policy is used as collateral for this loan. Just as you take a loan by mortgaging your house or gold jewellery, similarly here your policy is mortgaged. Taking a loan against your LIC policy can prove to be an easy financial solution in times of need. Before applying for this loan you should know about some important things like eligibility criteria, documentation and repayment.
Check these things before taking loan against LIC policy
policy eligibility
It is important to ensure whether your LIC policy is eligible for taking a loan or not. Therefore, to confirm, check your policy document or contact LIC directly.
loan amount
Know the maximum loan amount on your LIC policy. This amount is usually determined according to the surrender value of the policy, which can be up to 90 percent of the total surrender value. But keep in mind that it is necessary to deposit premium on the policy for at least 3 years, otherwise you will not get the loan.
loan application
To get the loan application form, one should contact your nearest LIC branch or visit their official website and fill the online form. It is important to fill the form properly and give all the necessary information asked in it.
documentation
Prepare all the documents required for loan application. This may include your policy document, proof of identity (like Aadhar Card, PAN Card, Passport etc.), proof of address and other documents asked by LIC.
loan processing
Loan application has to be submitted along with all the required documents through LIC branch office or online portal. LIC will first verify all the documents and if found correct, will process your loan application.
loan approval
Once your loan application is processed and approved by LIC, the loan amount will be disbursed. This loan amount will be deducted from the surrender value of your policy and interest will be charged on the loan amount.
Return
The loan amount has to be repaid on time along with applicable interest as per the terms and conditions of LIC. If you are unable to repay the loan and interest on time, the policy may lapse or the benefits on it may be reduced. Therefore, take special care that you repay the loan along with interest on time.
