Insurance Update :-
In this article I will be writing about the loan against LIC policy. As I have explained in my previous articles about the different kind of loans and how to apply for it. Loans agaist LIC policy is one of the good idea to get loans for cheaper price. It involves many restrictions because you will not be eligible to get huge loans under this scheme even if you have the policy. I will explain the conditions involved in getting the loan against LIC policy. If you have any doubts please post it in the comments section.
What is Cash Value for LIC policy?
In my previous article I have explained what is surrender value?. Cash Value is also referred as the Surrender Value of the polciy. Before applying for the loan you must know the exact cash value of the policy because if it is very low then there is no point in applting the loan if your need is huge amount.
Loan on LIC
The provision of loan against a life insurance policy is basically an advance against the cash value (surrender value) of the policy. The advance is always less than the case value. Most of the insureres approve 90% of the cash value of the policy. In case a loan is provided, the policy is absolutely assigned and held by the insurance company as security for repayment of the loan.
• You have to pay the interest specified in the loan.
• If you failed to pay the interest on time, that will be added to the principla and calculated the interest.
• If the total dept is more than the cash value, the insurer has the rights to terminate your policy.
• If the policy is matured before completing the loan, insurer has the rights to deduct the loan amount from your maturity amount.
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