In LIC Policy the loan is granted as per the terms and conditions applicable to the policy. 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.

In case the policy becomes a claim either by maturity or death within six months from the date of loan interest will be charged only up to the date of maturity/death.

You can either repay the loan with interest or pay just the interest and allow the principal amount to be deducted from the accumulated corpus during claim settlement.