Your questions answered

What is a loan against an LIC Policy?

This is a loan in which you pledge your policy to the lender for the term of the loan. The lender offers you a loan, up to the value locked in your policy. Think of it like a gold loan.

Are all LIC policies eligible?

Most endowment and unit-linked policies are eligible. Please contact us to check eligibility.

What is the interest rate on this loan?

The interest rate is 10% per annum. A loan against an LIC Policy is a fully secured loan, so the risk for the lender is minimal, allowing them to charge lower interest rates.

What is the loan amount that I can avail?

The minimum loan amount is Rs. 35,000. Your loan limit will depend on the surrender value of your policy.

What is a surrender value? How can I check it for my policy?

Surrender value is the amount that the insurance company pays the policyholder if he/she decides to terminate the plan before maturity.To find out your surrender value, please check on the LIC portal or reach out to us.

Do I need to have a good credit score and meet a minimum salary requirement to avail this loan?

No, a credit score is not required at all. There is no salary requirement to avail this loan.

What is the term of the loan?

The term of the loan is flexible, per your needs. The maximum term is 7 years or the date your LIC Policy matures, if this is in less than 7 years.

How do I repay the loan?

You repay the interest by setting a bank or UPI mandate to pay interest once every six months (2 x per year). The repayment schedule for the principal is flexible, and can be done at your convenience over the course of the loan term.

What are the documents required to avail the loan?

Step 1: Upload a copy of your policy to check eligibility
Step 2: If eligible, submit copies of the following:
1. Policy Document
2. PAN card
3. Aadhar card
4. Bank details (Canceled cheque/Passbook)
5. Photo

What happens if I cannot repay the loan by the end of the term?

If you fail to repay the loan, the lender to whom you have pledged the policy will recoup the loan amount from your policy. They will then close the loan and re-assign the policy back to you with a lower surrender value than when you pledged it to them.