A loan from LIC on policy comes very handy if you are looking to complete your personal procedures without any major hurdle and issue. People belonging to middle-class families often seek to apply for a loan from the insurance policy. They need this to complete their major occasions such as weddings, medical operations, or travel purposes. The loan for LIC policy is also quite popular among people because it comes with quite a low interest rate.
Do you want to know how to take loan against LIC policy? How to get loan from LIC insurance policy? How to take loan from LIC against policy? And how to avail loan against LIC policy? And your answer is yes then this blog post is for you.
However, in all these, getting it is no easy task if you are not familiar with the finance market. If you are among those LIC policyholders who see a loan from an insurance policy as a whole new concept. We are here to help you understand all the procedures thoroughly and become able to apply for them quite easily.
Table of Contents
The loan from LIC on Policy
LIC offers you a life insurance policy that provides your loved ones with financial support in case you are involved in an untimely accident. Also, LIC offers policyholders to take loans against the surrender value of the policy in certain life insurance policies. You need to be sure that your insurance policy has acquired a surrender value before taking it.
The loan provided by LIC against your insurance policy can be used for your purposes. We have mentioned the major points you should understand about taking a loan from LIC against LIC policy below.
Features
LIC provides you with some essential features when you apply for a loan. Below, we have mentioned some of the major features of the loan provided to you by LIC against your insurance policy.
1. LIC offers policy loans to individuals, Hindu Undivided Families, partnerships, and companies, and sole proprietorships.
2. LIC offers you a loan against the surrender value of your insurance policy. Usually, you are offered a total of 80% of the total of your surrender value as the loan amount.
3. You can easily apply for the loan online via the LIC web portal.
4. To get it, you need to provide the LIC team with an assignment that provides the rights of your policy to the lender.
5. This offers you a high amount of loan as it is subject to the surrender value of your insurance policy.
6. You are allowed to track your loan status through online and offline channels.
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Benefits of the loan for LIC policy
Getting a loan for an insurance policy offers you multiple benefits that make sure you get the best service without facing any major issues in the process. The major benefits that this loan provides are the following.
1. Low interest rates
When you opt for a loan against an insurance policy, you will have to pay quite low interest rates as compared to other types of loans.
2. Easy loan repayment
With this, you can choose to pay only the loan interest once or twice a year. Also, you are allowed to either repay it at the end of the policy term or adjust the loan amount borrowed from your policy maturity or death benefits. On the other hand, while we look at other loans, individuals need to pay EMIs every month.
3. No necessity of guarantor or collateral
When you go for this loan, you need not provide the lender with any collateral or guarantor to avail of the loan benefits.
4. No hidden charges
While getting a loan, you are not charged any amount in the form of processing fees, charges, or any other fee.
Loan against LIC policy eligibility
To successfully avail of the loan benefits against your LIC policy, you need to make up to some specific eligibility criteria set that are mentioned below.
1. You must be an Indian citizen aged over 18 years.
2. You must be a LIC policyholder.
3. Your life insurance policy must have acquired a surrender value for which the loan can be issued.
Documents required for a loan from LIC against policy
To get the complete benefits of the loan, you will be required to submit a few common documents for your identity verification. The major documents required to get this loan are as follows.
1. The original document of your life insurance policy.
2. Your identity proof such as your PAN Card, Aadhaar Card, and Driving License.
3. Your address proof.
4. Duly filled loan on LIC policy form.
5. Document with proof of your income such as salary receipt, bank receipt, etc.
6. The rights deed of your insurance policy.
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How to get loan from LIC policy online and offline?
Getting a loan from LIC against your policy can be quite simple if you have even just a little knowledge of finance. You can apply for this loan in two ways, Online and Offline, respectively. Below, we have mentioned both the steps of how to take loan on LIC policy using online and offline ways.
How to take loan from LIC policy online?
To apply online, you must be registered for premium services on the insurer’s website. If you are registered for the same, follow the simple steps below.
1. Make sure you have an active internet connection on your device and open the web browser.
2. Visit LIC web portal (licindia.in).
3. Click on the tab “Online Loan”.
4. After clicking on the hyperlink, it will take you to another web page.
5. Click on the option “Through Customer Portal” to request an online loan.
6. You need to log into the portal by entering your Id, Date of birth, and password in the required fields.
7. After logging into the web portal, you will need to select the policy against which you want to take a loan.
8. Click on continue or proceed to move to the next step.
9. Once your application is approved, it will be disbursed to your bank account within 3-5 days.
10. After the successful processing of your loan amount, the important loan documents sent to your registered email Id.
11. This is “how to get loan against LIC policy online”.
Notable Points:
1. You can check the current status of your loan online, or via SMS, or through call.
2. If you are not able to repay the interest amount within 30 days exceeding the due date, the lender owns the right to force close the insurance policy to adjust the loan amount.
3. If the policyholder dies during the loan period, LIC holds the right to deduct the loan amount from the claim settlement amount. If the amount of money remains after settling the loan amount, the same paid to the beneficiaries of the insurance policy.
How to get loan on LIC policy offline?
Getting a loan against an insurance policy becomes quite easy if you are going with the offline method. You just need to follow the below mentioned to avail of the loan benefits against your insurance policy.
1. Visit the nearest branch office of LIC.
2. Fill out the loan against LIC policy form.
3. Provide the team members with the required documents and wait for the approval.
4. Once it is approved, it will be disbursed to your bank account within 3-5 days.
The loan from LIC policy interest rate
As there are many other corporations in the country also who provide customers with the benefits of loans against LIC policies. Different corporations charge different interest rates. Below, we have mentioned some of the major loans against LIC policy provided along with their interest rates.
1. Life Insurance Corporation charges fair interest rates on the loan that differ from person to person.
2. LIC Housing Finance is another loan provider based on insurance policies. It charges interest rates starting from 14.80% per annum onwards.
3. Axis Bank charges a fair interest rate of 10.50% per annum on loans against LIC policy onwards.
4. Bajaj Finserv also provides you a loan for your insurance policy at an interest rate of 12.99% per annum onwards.
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Frequently Asked Questions
1. Can I get loan from LIC policy?
Yes, several companies offer you a loan against your insurance policy at reasonable interest rates. In this loan, your life insurance kept as collateral.
2. What is a surrender value?
The surrender value is the amount that a policyholder is provided with if he surrenders his policy before its maturity.
3. How much loan can I get from LIC policy?
The loan amount you will get against your policy depends on the total surrender value evaluated by your insurance policy. Generally, about 80% of the total surrender value of your policy is provided to you as the loan amount.
4. Can I take out loans against all kinds of insurance policies?
No, certain insurance policies provide you with the benefits of a loan against its surrender value.
Final thoughts
Availing loan benefits against your insurance policy can be a great choice if you want to complete your important procedures without paying too much interest rate for it. In this type of loan, you can repay the loan amount and the interest. And have your insurance policy back with all the benefits after its maturity.
In this article, we have covered some important points on loans against LIC policies. I hope, this article will give a clear idea of how to apply LIC loan against policy.
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