If you are holding an LIC of India Policy, you are virtually holding a Qualification that’ll grant you some Loan when need arises. Not only does a LIC grant loan for its endowment policies, many financial institutions, like Bank’s and NBFC’s grant Loans’ with your LIC Policy as a surety. Hence, you can either contact your LIC policy serving branch or check with your Banker to avail loan against LIC policy.
If you take loan from LIC, interest will be charged at 9% that has to be paid Semi annually. Normally, the Corporation will grant loans of up to 90% of the Policy Surrender value.
LIC provides loan for a minimum period of 6 months. If you need loan for any period less than 6 months, you’ll have no option but to pay interest for 6 months. But, in case the policy matures or the LA dies in these 6 months, interest will only be calculated from date of loan grant till the date of maturity/ death.
When the use is met and you have sufficient funds, you can repay the loan amount along with the interest at any time. Or, you can continue to only pay the Interest half yearly, and let the loan amount be deducted at the time your LIC Policy claim.