Not able to pay loan on LIC Policy?

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21-06-2010
Sahil

Not able to pay loan on LIC Policy?

I have a policy from LIC taken in year 2000 of four lakhs. But due to some personal circumstances, I have had to take loan of Rs.152,000/- on the same policy. The above policy is going to mature in 2020. Please suggest if I would surrender this policy or try to repay the loan amount which I will do with in a year’s time (2010-11). I have taken this loan around two years back, but was not able to pay any principal till date. Rate of Interest is 9.5%. Please advice.
21-06-2010
smartcat

The maximum loan amount available under the policy is 90% of the Surrender Value of the policy (85% in case of paid up policies) including cash value of bonus. If you are paying your premium of the LIC policy, on which you have taken loan, than you can surrender the policy and loan amount plus interest would be taken by LIC and remaining amount would be payback to you.
21-06-2010
PolicyWala

Quote:

Originally Posted by Sahil

I have a policy from LIC taken in year 2000 of four lakhs. But due to some personal circumstances, I have had to take loan of Rs.152,000/- on the same policy. The above policy is going to mature in 2020. Please suggest if I would surrender this policy or try to repay the loan amount which I will do with in a year’s time (2010-11). I have taken this loan around two years back, but was not able to pay any principal till date. Rate of Interest is 9.5%. Please advice.

You have not mentioned the policy name. Please provide complete details about the policy. Otherwise read the terms and conditions of the policy, it would explain everything.
22-06-2010
Expert

Quote:

Originally Posted by Sahil

I have a policy from LIC taken in year 2000 of four lakhs. But due to some personal circumstances, I have had to take loan of Rs.152,000/- on the same policy. The above policy is going to mature in 2020. Please suggest if I would surrender this policy or try to repay the loan amount which I will do with in a year’s time (2010-11). I have taken this loan around two years back, but was not able to pay any principal till date. Rate of Interest is 9.5%. Please advice.

Your Policy was assigned absolutely in favour of the Corporation, so you can surrender after only after their discretion. Please contact the nearest LIC branch or your Agent.