L.I.C - Policy Loan Details / Process

 

Eligibility - Based on the plan, premium & no. of years elapsed

Rate of Interest - 9.50%  p.a.

Process - Original policy bond + Loan application form to be submitted. Loan amount credited to the given bank in 7-10 working days.

Processing Fees: NIL

Effect of Loan: No change / effect will be on policy features due to loan

Repayment mode - Interest is to be paid once in 6 months online. (This is not EMI where the repayment amount has Interest + principal component in it)

Principal Repayment: Can be done anytime & any no. of times exceeding Rs.500 & accordingly interest will be calculated on the balance principal.

Due Date of Interest payment: Once in 6 months coinciding with the policy’s date of commencement.

Broken period / Interest: The period from date of loan to next loan due date. Broken period Interest is calculated for this period on pro-rata basis & actual interest is charged from next cycle.

Closure before 6 months: Loan can be closed either partly or completely. No pre-payment penalty charged. But the interest for the 6 months will have to be paid.

Closure after 6 months: Loan can be closed at any-time either partly or completely. No pre-payment penalty charged. For part payment, the next interest due will be calculated on the remaining principal. The original document will be returned to policy holder after closure.

Survival / Surrender & Maturity / Death Benefit: The Survival / Surrender / Maturity / Death claim amount is paid after adjusting the loan amount if the loan amount (principal or interest or both) not paid. Else all these happen as per policy conditions as usual.

Late Fees: One year grace period is given for the payment of the loan interest and still if it is not paid, the  interest gets added to the principal for which the next interest will be charged, i.e. Compounded mode.