How to Get a Loan from LIC: You Need to Know the Eligibility

How to Get a Loan from LIC: A Comprehensive Guide

When financial needs arise, exploring various options for securing a loan becomes essential. One avenue that policyholders can consider is obtaining a loan from the Life Insurance Corporation of India (LIC). In this guide, we’ll guide you on How to Get a Loan from LIC, the eligibility criteria, required documents, and step-by-step procedures for both offline and online application methods.

Can I get Loan on my LIC policy?

Policyholders who hold a life insurance policy with LIC have the opportunity to avail loans against their policies, provided the policy has acquired a surrender value. Surrender value typically accrues after the payment of two to three full years’ premiums. The surrender value represents the amount a policyholder is entitled to receive if they choose to cancel the policy before its designated term.

Maximum Loan Amount and Repayment

Once a policy has acquired a surrender value, policyholders can apply for a loan with LIC. The loan amount can vary based on policy type and terms. For policies in force, the maximum loan amount can be up to 90% of the surrender value. For paid-up policies, the maximum loan amount is generally capped at 80% of the surrender value.

Policyholders are expected to repay the loan along with the interest. LIC offers the flexibility to continue interest payments on a half-yearly basis while deducting the loan principal amount from the claim benefit payout.

Pointers on Availing Loans at LIC

• Loans can only be availed once the life insurance policy has acquired a surrender value.
• Not all policies offer loan facilities; details can be found in the respective policy brochures.
• Interest rates on policy loans at LIC usually start from around 9% and are dependent on the policy type.
• The minimum tenure for a loan is 6 months from the date of issuance.
• Interest on the loan is payable half-yearly.

How to Get a Loan From LIC?

To avail of a loan from LIC, policyholders need to follow a step-by-step process of How to Get a Loan from LIC that includes meeting certain eligibility criteria and submitting necessary documents.

Primary Requirements To Get a Loan From LIC

1. Fill out the loan application, agreeing to the terms and conditions.
2. The policy against which the loan is being sanctioned should be assigned completely in favor of LIC.
3. Present the receipt for the loan amount.

Documents Required For a Loan Application

• Loan forms as per the terms of the policy loan.
• Original policy bond.
• Loan application.
• Assignment deed.
• Identification proof, address proof, and income proof.
• Bank details or NEFT mandate.

Eligibility Criteria to Avail LIC’s Loan Facility

• The individual should be a policyholder of LIC’s insurance products.
• The policyholder should be a citizen of India.
• The policyholder should be a minimum of 18 years of age or above.
• The policy should have acquired surrender value.

Step-by-Step Procedure on How to Get a Loan from LIC

Policyholders have the option to apply for loans from LIC through both offline and online channels.

Offline Loan Application at LIC

1. Visit your nearest LIC branch.
2. Request the loan application form and complete it.
3. Submit the required forms and documents as guided by the advisor.
4. Upon verification, the loan amount will be sanctioned within 3-5 days.

Online Loan Application at LIC

1. Visit the official LIC website.
2. Navigate to the ‘Online Services’ section and click on ‘Online Loan.’
3. Make an online loan request through the Customer Portal (applicable for Premier Service Registered Customers).
4. Sign in with your User ID, password, and Date of Birth.
5. Select the LIC policy against which you want the loan.
6. Choose the loan amount, EMI options, interest payable, and tenure.
7. Submit the required documents and make the request.
8. Link your bank account for direct loan amount credit.

Steps for Online Loan Repayment/Interest Payment

For online repayment or interest payment, you have two options:

1. Pay Direct: Select Loan Repayment or Loan Interest Payment, provide the necessary details, and complete the payment.
2. Pay Through Customer Portal: Sign in, choose the payment type, and make the payment.

Can we get Personal loan from LIC?

Yes, you can get a personal loan from LIC. It is called a loan against insurance policy (LAP). To be eligible for a LAP, you must:

Be the policyholder of a valid LIC policy that is at least 3 years old and has not lapsed or matured.
Have a good credit history.
Be a resident of India.

How long does it take to get a LIC loan?

The processing time for a LAP can vary depending on the insurer and the amount of loan you are applying for. However, it typically takes 7-10 days to get your loan approved.

How much loan can I get from my insurance policy?

The amount of loan you can get from your insurance policy will depend on the type of policy you have, the amount of money you have accumulated in your policy, and your credit score. Generally, you can get a loan of up to 90% of the surrender value of your policy.

Final Talk

LIC has streamlined the loan application process through its online service portal, making it convenient for policyholders to manage their loans, repayments, and interest payments. These digital initiatives ensure hassle-free loan transactions and empower customers to address their financial needs promptly. By following this guide, policyholders can confidently navigate the loan application process at LIC and secure the funds they require.

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