How to Get A Loan From LIC?

By leveraging the surrender value of your policy, LIC enables you to secure funds quickly and conveniently. To get a loan from LIC, policyholders are required to fulfill certain criteria and follow a standard procedure set forth by the company, as discussed in the next sections. 

What Are LIC Policy Loans?

LIC offers loans against its life insurance policies, provided the policy acquires a surrender value. The surrender value is the amount you receive if you cancel your policy prematurely, usually achieved after paying premiums for two or three years.

Key Points to Remember:

• Loan Amount: You can borrow up to 90% of the surrender value for active policies and up to 80% for paid-up policies.

• Repayment: The loan must be repaid with interest, which is payable semi-annually. LIC may deduct unpaid principal or interest from the policy benefits.

• Interest Rate: The interest rate is declared annually by LIC and typically starts at 9%.

• Minimum Tenure: Loans can only be availed after the policy has been active for at least six months.

How to Take a Loan on LIC Policy?

LIC of India offers two process of taking a loan against LIC policy. Take a look:

1. Offline Process:

   Step 1: Visit an LIC Branch: Locate the nearest LIC branch and request a loan application form.

   Step 2: Fill and Submit Forms: Complete the form and attach all required documents.

   Step 3: Verification: The branch will verify the details and process the application.

   Step 4: Loan Approval: Once approved, the loan amount is credited to your account within 3-5 days.

2. Online Process:

   LIC provides a seamless online loan application service for registered users:

   Step 1: Log in to LIC’s Customer Portal:

   • Go to LIC’s official website.

   • Under the "Online Services" tab, click on "Online Loan."

   • Log in with your User ID and password or register for "Premier Services."

   Step 2: Submit Your Loan Request:

   • Select the policy against which you want the loan.

   • Enter details such as the loan amount, repayment options, and tenure.

   • Upload the required documents and submit the application.

   Step 3: Bank Account Linking:

   • Provide bank account details for direct credit of the loan amount.

Documents Required

Here’s a checklist of documents required for the loan application:

• Loan application forms (as per the policy type).

• Original policy bond.

• Assignment deed in favor of LIC.

• Valid ID proof, address proof, and income proof.

• NEFT mandate/bank account details.

How to Repay Your LIC Loan?

Online LIC Loan Repayment Options:

1. Pay Direct:

   • No login required.

   • Select "Loan Repayment" or "Loan Interest Payment" from the drop-down menu.

   • Fill in the customer validation and loan particulars fields.

   • Agree to the terms and make the payment.

2. Pay Through Customer Portal:

   • Log in to the LIC portal.

   • Choose "Loan Repayment" or "Loan Interest Payment."

   • Make the payment securely online.

Benefits of Availing a Loan From LIC

• Convenient Process: The option to apply and repay online saves time and effort.

• Quick Disbursement: Loans are processed quickly once eligibility criteria are met.

• Lower Interest Rates: Policy loans usually have lower interest rates compared to personal loans.

Wrapping It Up

Taking a loan against an LIC policy is a smart way to meet immediate financial needs without disrupting your long-term financial goals. Whether you prefer visiting a branch or utilizing LIC’s digital platform, the process is streamlined and customer-friendly. By following the steps and meeting the eligibility requirements, you can easily avail yourself of a loan from LIC.

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