By | December 3, 2022
How To Get Loan From LIC 

How To Get Loan From LIC

Many policies offered by the Life Insurance Corporation of India allow policyholders to request for a loan against the sum assured. This exclusive facility helps LIC customers to take care of their liquidity needs for emergencies. To avail a loan from LIC, policyholders need to meet certain criteria and follow a standard procedure laid down by the company, as discussed in the next sections.

How To Get Loan From LIC 

How To Get Loan From LIC

The Life Insurance Corporation of India was established on 1 September 1956, when the Parliament of India passed the Life Insurance of India Act, nationalizing the insurance industry in India. More than 245 insurance companies and provident fund societies were merged together.

Introduction to Policy Loans at LIC

LIC gives you the option to continue paying the interest on half-yearly basis by deducting the loan principal amount from the claim benefit payment.

  • Introduction to Policy Loans at LIC
  • Introduction to Policy Loans at LIC
  • When the policy acquires a surrender value, the policyholder can avail a loan against his LIC cover. Mostly, a life insurance policy acquires a surrender value after two to three full years’ premiums have been paid. This surrender value amount is paid to the policyholder if they choose to cancel their policy before the end of the policy term.

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Now, policyholders of such policies can avail loans from LIC up to a percentage of the acquired surrender value. For most policies in force, the maximum loan amount that can be availed is up to 90% of the surrender value. In case of paid-up policies, it is up to 80% of the surrender value.

How to Get a Loan From LIC?

Policyholders who have registered for Premier services can register a loan request against their life insurance policy on LIC’s customer portal. Note that LIC gives loans to life assured only on fulfilment of terms and conditions specified in the policy bond.

  • Primary Requirements To Get a Loan From LIC
  • Loan application agrees to the terms and conditions of the loan under the applicable policy
  • The policy against which the loan is being sanctioned should be fully vested in favor of LIC
  • Receipt for loan amount

Documents Required For a Loan Application

Here are following documents are required for get a loan from LIC.

Documents Required

Documents Required

  • Loan Form – 5196, 5205, 5200, 3516, 5198, 3599 (as per your policy loan terms)
  • Original policy bond
  • Loan application
  • Assignment Deed
  • Identity proof, Address proof, Income proof
  • Bank Details/NEFT Mandate

Eligibility Criteria to Avail LIC’s Loan Facility

  • A person should be a policyholder of LIC’s insurance products
  • The policy holder should be a citizen of India
  • The age of the policyholder should be at least 18 years or above
  • The policy must have received the surrender value.

Pointers on Availing Loans at LIC

  • LIC is responsible for recovering the outstanding amount and interest payable from claims that occur on maturity of the policy or on the death of the policyholder.
  • A loan can be availed only after the life insurance policy attains the surrender value.
  • Not all policies offer this benefit. Such provisions are detailed in the policy brochures of the loan facilitators.
  • The interest rate is declared by LIC every year and depends more on the type of policy. Interest rates on policy loans at LIC usually start at around 9%.
  • LIC Minimum tenure during which a loan can be availed is 6 months from its date of issue.

Interest on the loan is payable half yearly.

Interest on the loan

Interest on the loan

Step by step procedure for How to Get a Loan from LIC
How to take loan from LIC
How to take loan from LIC
Policy holders can apply for the loan through offline channel or online through LIC’s e-portal. Note that online services can be availed only by those policyholders who have subscribed to ‘Premier Services’ on the company’s online customer portal.

There are two ways to get a loan from LIC

  • Online Loan Application at LIC
  • Offline Loan Application at LIC
  • Online Loan Application at LIC

For Getting Loan Online from LIC, you can follow steps.

  • Visit the official website of LIC.
  • Under the ‘Online Services’ tab, click on ‘Online Loans’.
  • Apply online loan through customer portal. Note that this is applicable only in case of Premier service registered customers.
  • This will take you to an external site, where you have to sign in with your user ID, password and date of birth.
  • You also have the option to sign up at this stage if you don’t have an account.
  • Select the LIC policy against which you want to avail the loan facility.
  • Select the loan amount, EMI payment options, interest payable and loan tenure.
  • Submit the requested documents and proceed to request.
  • Link your bank account to LIC to credit the loan amount directly to your account.

Offline Loan Application at LIC

Application at LIC

Application at LIC

For Getting Loan Offline from LIC, you can follow steps.

  • Visit your nearest LIC branch.
  • Request and fill the loan application form.
  • Submit the required forms and documents as prescribed by the advisor at the branch.
  • Upon verification, the loan amount will be sanctioned in your name in 3-5 days.

Features and Benefits of Loan against LIC Policy

Some of the features and benefits of borrowing a loan against LIC policy are as follows:

  • One of the most satisfying features of LIC is that it offers its policyholders up to 90% of the surrender value as their sum of loan.
  • There are various online platforms available from where you can apply for a loan against your life insurance policy.
  • The loan amount is calculated on the surrender value of your policy. The sum of money you can take as a loan is subjected to the rules and guidelines of LIC.
  • If needed, you can take help from the LIC policy loan calculator to verify whether the loan amount is sufficient for you.
  • The minimum time interval for loan repayment of LIC is 6 months.
  • You can save loan processing time by applying for a LIC loan instead of going to a financial institution.
  • The credit facility of life insurance policies is offered to sole proprietorships, firms, individuals, Hindu Undivided Families (HUFs), partnerships, etc.
  • The rate of interest for LIC policy is comparatively much lesser than a personal loan. LIC charges only a 10-12% interest rate for loans against the insurance policy.
  • You can track your loan information through various available online and offline networks.`


LIC has made the loan application process much easier through its online service portal. Now you can repay your loan amount and interest in just a few clicks. These online services are completely free and hence, policy holders should use them to avoid the hassle of visiting the branch. These digital initiatives have made availing loans from LIC very convenient and fast, enabling its customers to address their capital needs at the earliest. This guide will help you navigate the entire loan application process at LIC.





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