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Many of LIC plans are of endowment
type and you would be allowed to raise a loan against your policy
should you require funds. You repay the loan with interest or continue
paying the interest and allow the loan to be deducted at the time
of the claim payments.
Further loans on policies are also allowed after deduction of earlier
out standings Most financial institutions too allow loans against
LIC policies based on the value LIC quotes on request from you
Policy Loans
The Corporation can grant a loan to the policyholder against his
policy as per the terms and conditions applicable to the policy.
The requirements for granting a loan are as under :
a) Application for loan with an endorsement of terms and conditions
of the loan being placed on the policy.
b) Policy to be assigned absolutely in favour of the Corporation
c) A receipt for the 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. The rate of interest charged on loans is at
10-1/2% to be paid half-yearly.
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.
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