LIFE
• Claim Settlement
  
• Hints on proposal Forms
  
• Nomination
  
• Revival of Policies
  
• Loan on Policies
  
• Lost Policies
  
• Tax Benefits
  
• Surrender Value
  
• Assignment
  
• Delayed Payment of Premiums
  
  
  NON-LIFE
• Claim Settlements
  
• Hints on Proposal Forms
  
• Legal Aspects
  
• Guide
  

Loans On Policies

• Policyholders are eligible to take loans on their policies subject to certain rules.

• The policyholder has to apply for a loan in a prescribed form and submit the Policy Bond along with the form duly completed.

• The loan amount is calculated depending on the Surrender Value (SV) that the policy would have acquired, and approximately 85% of the Surrender Value is given as loan.

• Rate of interested charged on loans taken on insurance policies varies from company to company and from time to time.

• A policyholder can repay the loan amount either in part or in full, any time during the term of the Policy. For LIC, the minimum repayment should be Rs. 50 and thereafter in multiples of Rs. 10.

• If the loan amount is not repaid during the term of the Policy or early claim, the amount of loan plus interest, if any, will be deducted from the claim money payable and the balance amount will be paid to the claimant. In case of LIC , if the interest is not paid regularly every half year, then the interest is calculated on compound interest basis.

• If the premiums are not paid regularly, that is, if the policy is not kept in force, there is a possibility that the loan amount along with accrued interest exceeds the surrender value. At that stage, foreclosure action is taken on the policy.

Generally, plans for Children or special plans like Jeevan Griha and Deferred Annuity/ Pension Plans as well as Money Back Plans etc. are not eligible for loans.