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How to Apply for Loan Against LIC Policy?


There are certain norms that you have to fulfill to apply for a loan against your LIC policy. Only the person who is holding LIC policy for more than three years is eligible to avail loan. Loan amount varies depending on the policy amount and time period of the policy. This is secured loan and interest charged are less compared to other loan rates.


How to Apply for Loan Against LIC Policy?

How to Apply?

One needs to fill the application form to apply for loan from LIC. One can get this form through website or through agent. The application should be submitted at the branch.

Note that application for loan should be with an endorsement of terms and conditions of the loan being placed on the policy and policy to be assigned absolutely in favour of the Corporation, means you need to surrender your original LIC policy bond

Interest Rates:

The rate of interest charged on loans is at 9-10 per cent to be paid half-yearly.

Loan Amount:

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.

Loan Tenure:

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.


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 upto the date of maturity/death.

If any failure 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.

Applying procedure is not time consuming, once approved it may take 2-3 days to credit in your account.

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