Taking a Loan Against Your LIC Policy: Limits, Interest and Risks

Most traditional plans acquire a loan facility once they have a surrender value, generally after two to three years of paid premiums.

You can usually borrow a large share of the surrender value. Interest is charged half-yearly and the policy stands assigned to LIC until repaid.

It is cheaper than most personal loans and far cheaper than a credit card, and there is no credit check because your own policy is the security.

Any outstanding loan and interest is deducted from a maturity or death claim, so treat it as a bridge, not a substitute for income.

Send us the policy number if you want the exact loan eligibility figure before you apply.