Revised loan terms and interest payments
**Accessing Quick Funds with Your Life Insurance Corporation (LIC) Policy**
For those seeking a financial boost without the need for high-interest unsecured loans or the liquidation of other assets, Life Insurance Corporation (LIC) policies offer an attractive alternative. With loans against LIC policies, policyholders can secure funds using their endowment plans, money-back policies, or whole-life plans.
### Eligibility and Loan Amount To be eligible for a loan, you must have an existing LIC policy with a sufficient surrender value. Generally, loans are available only after the policy has completed the minimum premium payment period required to accumulate a surrender value. You can typically borrow up to 80-90% of the surrender value of your LIC policy, depending on the policy type and tenure.
### Interest Rates and Repayment Interest rates for loans against LIC policies are competitive, with examples starting at around 7.5% per annum, though specific rates may vary based on creditworthiness and lender terms. Regular interest payments must be made on schedule; failure to pay interest can lead to loan foreclosure. In case of the policyholder’s death, interest is charged only until the date of death, and LIC uses any maturity proceeds to recover outstanding loan and interest amounts.
### Application Process The application process involves four steps: confirming your LIC policy type, choosing a lending partner, submitting the application, and policy assignment. The application process involves filling in basic details and uploading required documents online. Trusted providers offering fast Loan Against Surrender Value (LAS) processing should be chosen as lending partners. Upon verification, the sanctioned loan amount is credited to the borrower's bank account within 24-48 hours.
### Required Documents The following documents are typically required when applying for a loan: KYC documents (Aadhaar Card, PAN Card, Passport), proof of address (utility bills, driving licence, voter ID), policy documents (original LIC policy bond or premium receipts), loan application form (filled and signed), and a cancelled cheque for direct crediting of the loan amount to your bank account.
### Other Key Features & Conditions - Minimum loan tenure is usually six months. - Prepayment of the loan is allowed only after paying a minimum of 6 EMIs. - If the policy matures during the loan tenure, LIC can use the maturity amount to clear any outstanding loan and interest. - LIC reserves the right to cancel the policy if the outstanding loan plus interest exceeds the surrender value.
This loan option offers flexible and quick access to funds without requiring income proof or credit score verification, as the loan is secured against your policy’s surrender value. With the right planning and careful consideration, a loan against your LIC policy can provide a valuable financial solution for those in need of immediate liquidity.
| Aspect | Details | |----------------------|------------------------------------------------| | **Eligibility** | LIC policy with surrender value (endowment, ULIP, etc.) | | **Loan Amount** | Up to 80–90% of surrender value | | **Interest Rate** | Typically competitive; example: ~7.5% p.a. (varies) | | **Documents Needed** | KYC, address proof, policy document, application form, cancelled cheque | | **Application Steps**| Confirm policy → Apply → Submit documents → Assign policy → Approval & disbursal | | **Loan Tenure** | Minimum 6 months | | **Repayment** | Regular interest payments; prepayment after 6 EMIs allowed | | **Special Notes** | Loan closes on policy maturity; risk of foreclosure if payments lapse |
- For individuals looking to invest their funds while also having an option for quick access to cash, personal finance strategies could involve considering a Life Insurance Corporation (LIC) policy with a loan option.
- In addition to the potential benefits of life insurance coverage, investing in a LIC policy can provide a means for personal finance management, offering personal loan opportunities that can be repaid using the policy's surrender value.
