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Writer's pictureDialabank

Should we take a personal loan against the life insurance policy?



The loan popularly known as a loan against LIC policy has the limited use of flexible interest rates that can be used by the borrower to cover various costs. An anti-insurance loan requires the borrower to submit an insurance policy with the lender as collateral. If the borrower is unable to repay the loan, then the lender has the right to adhere to the policy until the debt is canceled by the borrower.


Eligibility criteria

The following are some of the key qualifications for LIC policy:

  • The applicant must be an Indian citizen and at least 18 years old

  • The applicant must have a valid LIC policy (or other life insurance)

  • LIC policy used to obtain loans secured a commitment amount (term plans are not eligible)

  • At least three years of LIC premium must be paid in full

  • The policy must be provided in full by the LIC


Currently, the long-term plans offered by LIC cannot be used as collateral for this secure loan as they do not have a guaranteed commitment amount. The following are some of the popular LIC policies that can be used as collateral for loans against LIC policy:


  • Jeevan Pragati

  • Jeevan Labh

  • Single-Premium Endowment Program

  • New Endowment System

  • New Jeevan Anand

  • Jeevan Rakshak

  • Premium Endowment Program

  • Jeevan Lakshya


Steps to apply for a personal loan against the life insurance policy

You can currently apply the same way using the offline or online method:


  • Offline method

The offline method requires you to visit the nearest LIC office and complete the loan application forms and valid KYC documents and submit them along with the original policy document. Once the details of the application have been confirmed, a loan amount of up to 90% of the policy commitment amount is paid.


  • Online method

If you have registered for LIC e-Services, you can log into your online account and check if your insurance is eligible for a loan that conflicts with LIC policy. City Union Bank Personal Loan apply option allows you to apply from anywhere. If so, the terms and conditions, interest rates, and other aspects of the loan will be displayed to you online. Upon submission of the application, you may be required to download KYC documents or send them to your nearest LIC Office for your loan application to be processed.


Documents Required to Apply for a Loan Representative for LIC Policy

The following is a list of important personal loan documents that need to be provided to apply for this secure loan:

  • Original policy document

  • Proof of residence: Aadhaar card, voter ID card, driver's license, utility buildings

  • Income proof: Bank account statements and salary payslips

  • Title deed

  • Loans against LIC Policy Portal- Registration and login

  • Life Insurance Corporation of India does not offer a separate loan site. You, therefore, need to register and log in to the LIC eServices portal to access online services related to your LIC policy loans.


a) LIC Registration Process for Services

The following is a step-by-step guide to registering with LIC on the Services Portal:

Step1. Go to LIC in the Services Portal and click on the “Don't have an account? Register ”option

Step2. Fill in the valid details to register for LIC eServices online

Step3. Once you have clicked "Continue", you can complete the registration process by setting your favorite password. You can set a user ID or use your email / mobile phone to access your account.


b) How to get in

The following is a step-by-step process for logging into LIC on the Services Portal:

Step1. Go to the LIC e-Services Portal and provide your User ID/email or phone number and password to access your account.

Step2. Upon successful login, you can access the policy details and a wide range of services provided by LIC. To know the EMIs you can use Personal Loan Calculator.


Conclusion


How to Pay Your Loan?

To pay off your EMI loan online, you must log in to the e-Services portal and select the loan details. After that, you will see the current details of your outstanding loans.


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