Who is eligible?
Only the policyholder, who is holding LIC India policy for more than three years is eligible to avail loan.
How much loan could I take?
LIC Loan amount varies depending on the policy amount and time period of the policy. The eligible loan amount is calculated as 90% of LIC policy surrender value. The surrender value of LIC policy comes into effect only after you have paid three full year premiums for the policy.
1- Original LIC Policy Document
2- Filled Loan Application Form (Form No 5196, Form No 5205, Form No 5200, Form 3516, Form No 5198 and Form 3599)
3- Endorsement Form (Form No. 3599C) for Loan on Minor LIC Policy
4- ID proof
5- Age Proof (if not submitted earlier)
6- Assignment / Reassignment (if any)
7- Cancelled Cheque or Copy of Policyholder’s Bank Passbook
8- NEFT Mandate Form (so that the maturity proceeds can directly be transferred into the policyholder’s account)
Please submit all the above documents at the branch where you hold the LIC Policy. Once you have submitted above documents, under discretion of concerned manager, policyholder can receive the loan sanctioned cheque in a two-three days. Some times they may send it through Post at policyholder request.
What is the minimum period for loan?
The minimum period for which a loan can be granted is six months from the date of its payment. If repayment of loan is desired within this period the interest for the minimum period of six months will have to be paid.
What happen in case of Policy Maturity/Death of Policyholder?
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.
If policyholder fails to pay interest in the course of the term of the insurance policy or early claim, the loan amount and interest, will be deducted from the claim amount and balance will be given to the claimant.
Can policyholder take more than one loan?
Yes, LIC India also offers the benefit to the customer of a second loan option, even if he fails to pay the interest on the existing loan, provided the insured policy value increases with the number of years.
You can avail this facility for their personal loan needs like children education, Marriage, House Building, Medical treatment etc. for low interest rate. But you does not even have to give the reason for the loan.
Thing you should know
1- Current Rate of Interest is 10% per annum
2- Interest calculated twice in a year. That means for every six months.
3- The loan may be repaid at any time during the policy term. There is no Fixed EMIs for Repayment. You can pay as much principal as you can.
4- Interest calculation will be done on outstanding to be paid principal. So if you pay Principal frequently your Interest amount will reduced.
5- If you are unable to pay the principal, pay only interest, principal amount will be adjusted at the time of maturity of your policy.
6- Online payment facility not applicable for loans repayment, you should pay the amount at the loan receiving branch only.
7- After completion of your repayment, you receive your original policy document submitted at the time loan application.
8-This is secured loan and interest charged are less compared to other loan rates.
9- Please note always keep a photocopy of all the above documents in your own record.