Life Insurance Corporation (LIC) is the largest public sector company in India offering life covers to people who are looking for insurance. Founded in 1956 and headquartered in Mumbai, LIC has more than 2000 branches and lakhs of agents across the country. In addition to insurance policies, the company also provides loans against LIC policy. Currently, a loan against an LIC policy is one of the simplest and easiest loans to avail in the finance market.
Key Features
Here are some of the key features of a loan against LIC policy-
• This loan can only be availed by LIC endowment policyholders
• The given loan amount is an advance on the surrender value
• The interest loan on the loan varies between 9-11%
• The loan amount, which you can borrow, depends on the LIC policy’s surrender value
• The LIC holds the insurance policy as collateral. In case the applicant/borrower fails to repay his/her loan, the company can withhold the insurance policy
• The company has the right to terminate the insurance policy in case the loan amount exceeds the surrender value
• In case the LIC policy matures before full repayment of the loan, the company can deduct the required amount before passing over the proceeds of the policy to the policyholder
• If the applicant fails to pay the interest before its due date, the interest amount will automatically be added to the principal. Accordingly, the new interest will be calculated.
Benefits of Taking Loan against LIC Policy
Here is a look at some of the benefits of taking a loan against LIC policy-
• The interest rate is relatively low on loan against LIC policy. Usually, the company charges a rate varying between 9-11% on the loan in comparison to banks those charge interest rate ranging from 16-24%.
• LIC does not check the applicant’s credit score before issuing the loan. Therefore, a loan against LIC policy is beneficial and convenient for those who have a low credit rating.
• Unlike banks, LIC does not charge any amount on loan pre-payment of loans or as processing fees.
• If the applicant is able to repay the existing loan against a LIC policy successfully, the company allows him/her to apply for loans in the future
• LIC allows financial flexibility. The applicant can pay the interest on the loan amount semi-annually.
• Since the policyholder is technically borrowing his own money, the process of loan disbursal is faster
• The applicant can apply for a loan against LIC policy online, which makes it more of a convenient option for you
The Life Insurance Corporation of India is one of the most reputable companies in the finance market. If you are considering taking a loan, you can certainly apply for the same with LIC. However, keep in mind that not all LIC plans offer loan against the insurance policy. Therefore, you need to look at the policy carefully before applying for one.
Key Features
Here are some of the key features of a loan against LIC policy-
• This loan can only be availed by LIC endowment policyholders
• The given loan amount is an advance on the surrender value
• The interest loan on the loan varies between 9-11%
• The loan amount, which you can borrow, depends on the LIC policy’s surrender value
• The LIC holds the insurance policy as collateral. In case the applicant/borrower fails to repay his/her loan, the company can withhold the insurance policy
• The company has the right to terminate the insurance policy in case the loan amount exceeds the surrender value
• In case the LIC policy matures before full repayment of the loan, the company can deduct the required amount before passing over the proceeds of the policy to the policyholder
• If the applicant fails to pay the interest before its due date, the interest amount will automatically be added to the principal. Accordingly, the new interest will be calculated.
Benefits of Taking Loan against LIC Policy
Here is a look at some of the benefits of taking a loan against LIC policy-
• The interest rate is relatively low on loan against LIC policy. Usually, the company charges a rate varying between 9-11% on the loan in comparison to banks those charge interest rate ranging from 16-24%.
• LIC does not check the applicant’s credit score before issuing the loan. Therefore, a loan against LIC policy is beneficial and convenient for those who have a low credit rating.
• Unlike banks, LIC does not charge any amount on loan pre-payment of loans or as processing fees.
• If the applicant is able to repay the existing loan against a LIC policy successfully, the company allows him/her to apply for loans in the future
• LIC allows financial flexibility. The applicant can pay the interest on the loan amount semi-annually.
• Since the policyholder is technically borrowing his own money, the process of loan disbursal is faster
• The applicant can apply for a loan against LIC policy online, which makes it more of a convenient option for you
The Life Insurance Corporation of India is one of the most reputable companies in the finance market. If you are considering taking a loan, you can certainly apply for the same with LIC. However, keep in mind that not all LIC plans offer loan against the insurance policy. Therefore, you need to look at the policy carefully before applying for one.
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