People often take loans during difficult times, and insurance also plays an important role in emergencies. Life Insurance Corporation of India (LIC) is the largest insurance company in the country. Along with providing insurance benefits, LIC also offers loan facilities. If you have a LIC policy, you can take a loan against it. The interest rate on a loan taken from LIC is lower than that of a personal loan. In this article, we will explain how much interest you need to pay on a loan against an insurance policy and what its rules are.

Rules for Taking a Loan Against Your LIC Policy

1. Eligibility for Loan

You can get a loan only under traditional and endowment LIC policies.

2. Loan Amount

The loan amount is based on the surrender value of your LIC policy. You can borrow up to 80-90% of the surrender value of the policy.

3. Interest Rates

The interest rate for a loan against the policy is generally between 10-12%. However, this may vary depending on the policyholder’s profile.

4. Policy Mortgage

When you take a loan, LIC will mortgage your policy until the loan is repaid.

5. Loan Deduction Upon Maturity

If the policy matures before the loan is repaid, the loan amount will be deducted from the maturity amount.

How to Apply for a Loan Against Your LIC Policy

Offline Method

To apply offline, visit your nearest LIC office with your KYC documents.

Online Method

For the online process, you need to register on LIC E-Sewa. Once registered, log in to your account and apply for the loan.

Before applying, make sure to carefully read all the terms and conditions. If anything is unclear, feel free to ask for clarification. After understanding everything, submit the application form and upload the necessary KYC documents online.