Eligibility Criteria for Personal Loan against LIC Policy
Any person who is the legal policyholder of the LIC policy can apply for such a loan and avail it. Of course, the basic criteria for availing a particular policy must be met first and the policy must have achieved a surrender value after the payment of three annual premiums in full. Considering policies which are for minors, the loan can be availed only after the minor reaches the legal voting age and is in ownership of the policy and also by the guardian by signing an endorsement form.
Personal Loan against LIC Policy
The accepted loan amount that can be sanctioned is dependent on the amount of cover available in the policy and the time frame that the policy covers. After 3 years’ payment of premiums, the LIC policy acquires a surrender value and only then a loan can be availed against the LIC policy. The eligible loan amount will be 90% of the surrender value of the policy.
Documents for a Personal Loan against LIC Policy
The list of documents that will be required of the policyholder are –
- Original document of the LIC Policy
- One of the required loan application forms that needs to be filled out
- Endorsement form for loans that are being taken on a minor’s policy
- Government approved ID proof
- Proof of age (in case it hasn’t been submitted earlier at policy inception)
- Forms pertaining to assignment or reassignment
- Policyholder’s active bank’s passbook or a cancelled cheque
- Mandate form for NEFT (that underlines how maturity proceeds can be directly transferred to the policyholders’ account)