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How to take a loan against your LIC policy (Simple Guide)

Are you looking to take a loan against your LIC policy? This article will guide you on how you can do that in simple steps. There are a lot of times where you wish you could take a loan against your existing LIC policy, be it to pay for education expenses, unforeseen medical expenses, or anything else.

Some LIC policies offer their policyholders the flexibility to take a loan against their LIC policy, this could be a massive boon during challenging times for policyholders.

Further, it is also important to know if your LIC policy does offer you this benefit, in case the need arises.

This article will be touching base on the following important topics:

  • LIC policies that offer loans
  • The process to apply for a loan against LIC policy
  • Required documents
  • Eligibility for availing of a loan
  • Benefits of availing a loan against your LIC policy

LIC policies that offer loans against a policy

LIC offers quite a few policies that provide a loan facility. If you have one of the below-mentioned policies, you can avail for a loan by keeping your policy value as collateral. Let us find out which policies are eligible for this benefit:

Policy namePolicy type
LIC Jeevan UmangWhole life
LIC Jeevan PragatiEndowment
LIC Jeevan LabhEndowment
LIC New Endowment PlanEndowment
LIC Jeevan RakshakEndowment
LIC Jeevan LakshyaEndowment
LIC Aadhar StambhEndowment
LIC Single Premium Endowment PlanEndowment
LIC New Jeevan AnandEndowment
LIC Aadhar ShilaEndowment
LIC New Money Back Plan (20 years & 25 years)Money back
LIC New Bima BachatMoney back
LIC Bima ShreeMoney back
LIC Jeevan ShiromaniMoney back
LIC New Children’s Money Back PlanMoney back
LIC Jeevan TarunMoney back

You can avail of a loan against your policy if you have any of the above policies. That being said, loans are available after the policyholder has completed 1-3 premium paying years.

The process to apply for a loan against LIC policy

You can apply for a loan in 2 ways, offline and online. Let us lay down both loan application processes for you.

Online loan application

Step 1: Register or log in through LIC e-services portal

If you have not registered on LIC e-services, you can view our LIC registration and LIC login guide. They will show you how you can easily register and log in to your LIC e-services account.

Step 2: Check if your policy is eligible to receive a loan

Step 3: Check the interest rate of the loan

Step 4: Check the available loan amount

Step 5: Apply for the loan

Offline loan application

You can also visit your nearest LIC branch and apply for a loan. Upon visiting, you can request the office to hand over a loan application form. Kindly fill in the form and attach your KYC details. Once done, hand over the form to the officer. He will get back to you at your registered phone number.

Required documents

The following documents are required on your part if you wish to apply for a loan:

  • Original policy bond
  • Aadhar card
  • PAN card
  • Voters ID
  • Bank account statement
  • Driver’s license
  • Duly filled loan application form

Eligibility for availing of a loan

The following are the eligibility criteria for availing of a loan with LIC

  • The policyholder must be an Indian.
  • The policyholder must be over 18 years of age.
  • The policyholder must have a running LIC policy.
  • The policyholder must have paid policy premium for 1-3 years (certain policies provide a loan if the policyholder has paid the first year’s premium, certain policies require that the policyholder has paid at least 3 years premium)

Benefits of availing a loan against your LIC policy

No credit score: You will not require a credit score to avail a LIC loan. The loan value will simply depend on your policy surrender value. The higher the surrender value, the higher the loan you can avail of.

Comparatively low-interest rates: As LIC is a government organization and majorly exists for the welfare of Indians, the interest rates charged by LIC are comparatively lower compared to private and public sector banks. LIC usually charges a 9%-11% interest rate on their loans.

Fast and easy processing: The loan processing is generally done very quickly as LIC already has all the details that they need with them. Online and offline loan processing will be done swiftly.

Flexible loan repayment: You can repay your loans via flexible bite-sized EMIs.

Loan on 90% of surrender value: You can apply for a loan up to 90% of your policy’s surrender value.

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