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Home Personal Finance Good News: You can easily take cheap loan against LIC policy, this...

Good News: You can easily take cheap loan against LIC policy, this is the way

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LIC also gives loan against its policy very easily and at very low rates.



Life Insurance Corporation of India has been a companion of difficult times for the common people for the past several decades. But not many people know that LIC policy works not only after your life but with your life as well. Yes, LIC also gives loan against its policy very easily and at very low rates. Along with this, it also provides many options to repay the loan.

Life Insurance Corporation of India offers personal loan against many of its insurance policies. LIC provides this loan only on some urgent expenses like travel, treatment of illness, higher education, marriage, home repair etc. In lieu of this loan, LIC collects your policy documents. In this case it is a secured loan. Due to which you get a loan at an interest rate less than the market rate. In case the applicant is unable to repay the loan, LIC can reimburse the same from the maturity of the insurance policy or the claim amount.

How much do you get loan

As per the rules of LIC, gives loan to the policy holder up to 90% of the surrender value of the policy. In case of some paid-up plans, this limit is only up to 85% of the policy surrender value. In both cases, this surrender value is used as security.

Who gets loan

The minimum age of the applicant should be 18 years. Applicant must have a valid LIC policy. The LIC policy used for availing the loan must have guaranteed surrender value i.e. this facility cannot be available on term policies. LIC premium must have been paid in full for at least 3 years.

How to Apply for Loan Against LIC Policy

You can apply for loan against LIC policy through online or offline mode.

  1. You visit the LIC office and fill the loan application form along with applicable KYC documents and submit along with original policy document.
  2. If you have registered for LIC e-Services, then you can login to your online account and apply from the same portal.
  3. On submission of the application you may need to upload the KYC documents or send it to the nearest LIC office to make your loan application.

Loan is not available on these policies

Only available on endowment plans, income plans and unit linked plans that have a surrender value. It is not available on term plans. For example, this loan is available on LIC’s New Jeevan Anand, Jeevan Rakshak, Jeevan Lakshya, Jeevan Pragati, Jeevan Labh etc. plans.

This is the loan tenure

The minimum tenure of the loan is 6 months, but it can be repaid till the entire maturity period. Not only this, LIC also gives the facility that you just keep paying the interest and get the principal amount deducted from the maturity amount later.

Loan Interest Rate on LIC Policy


The interest rate on taking a loan from Life Insurance Corporation of India (LIC) is low. Today, personal loan rates in other banks are more than 18 percent, while LIC is charging 10.5 percent interest for this, which is the lowest in the market.

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