.avif)
LIC Education Loan
In the evolving world of educational financing, LIC’s policies stand out as a promising option for students and parents seeking to secure their academic futures. LIC, a trusted name in insurance and financial services, offers unique policies designed to ease the financial burden.
In this article, you will explore the specifics of the Loan Against LIC Policy, its eligibility criteria, the application process, and more. Keep reading to learn more.
Are There Any LIC Education Loans?
LIC (Life Insurance Corporation of India) does not provide traditional education loans. Instead, it offers insurance plans and policies designed to provide financial support for educational expenses through insurance and investment products.
These policies aim to accumulate funds over time and provide a lump sum payout that can be used for education. However, they are not loans but rather investment and insurance policies with a focus on future financial planning for education.
Get Education Loan for Any College in India. 100% Fees Financed- Propelld Education Loan
Get Education Loan 10X Faster than Banks.
What is LIC Education Loan Against LIC Policies?
A loan against LIC policies is a financial product that allows policyholders to borrow money using their LIC insurance policies as collateral. Here’s how it works and what you need to know.
1. Eligibility
To be eligible for a loan against LIC policies, you must have an existing LIC policy with a certain level of surrender value. This value is the amount the policyholder would receive if they terminate the policy before its maturity.
2. Loan Amount
The amount you can borrow is usually a percentage of the policy’s surrender value. LIC typically offers up to 90% of the surrender value as a loan, but this can vary based on the specific policy and terms.
3. Interest Rates
LIC determines the rates, which can vary depending on the type of policy and the loan amount. The applicant's credit profile and the current rates based on government bond yields determine the interest rate on a loan under an LIC policy.
5. Collateral
The LIC policy serves as collateral for the loan. If you fail to repay the loan, LIC has the right to adjust the outstanding amount from the policy’s maturity proceeds or surrender value.
6. Policy Specifics
Not all LIC policies offer a loan facility. Only those plans with a surrender value will have it.
Also Read: How to Get an Education Loan for Abroad Studies in 2024?
Get upto 100% Education Fees Financed with Propelld. Simplified Processing Dedicated Support.
LIC Education Loan Against the Policy: Eligibility Criteria
Policyholders must meet specific criteria to be eligible for a loan against LIC policies. Here’s a breakdown of the critical requirements.
Top 8 LIC Policies Eligible for Secured Education Loans
Many borrowers assume that every LIC policy can be pledged as collateral for an education loan. However, that’s not the case. Only select LIC policies come with the option of availing an education loan facility. Therefore, policyholders need to opt for plans that specifically allow this benefit.
Below are some of the top LIC policies that are eligible for an education loan against the policy:
- Jeevan Pragati
- Jeevan Labh
- Single-Premium Endowment Plan
- New Endowment Plan
- New Jeevan Anand
- Jeevan Rakshak
- Limited Premium Endowment Plan
- Jeevan Lakshya
Education Loan Against the LIC Policy: Application Process
Securing a loan against your LIC policy can provide you with the financial support you need. This straightforward process involves specific steps to ensure efficient handling.
Here’s a detailed overview of how to apply for a loan against your LIC policy.
Online Application Process
1. Log In to LIC’s Official Website
Sign up for LIC’s e-services and access your account.
2. Fill Out the Application Form
Check your eligibility and complete the online application form. Upload scanned copies of your KYC documents. Then, send the original physical documents to the nearest LIC branch for verification.
3. Submit the Application
Review the information and apply.
4. Verification and Approval
LIC will process your application and verify the submitted documents. This may take a few days.
5. Loan Disbursement
Upon approval, LIC will disburse the funds.
Offline Application Process
1. Visit a LIC Branch
Go to the nearest LIC branch where your policy is registered. Branch locations can be found on the LIC website or by calling customer service.
2. Complete the Application Form
Fill out the application form with accurate information about your policy and the amount you wish to borrow. Ensure all fields are completed correctly.
3. Submit Required Documents with the Policy Bond
Provide the necessary documents along with your completed application form. This typically includes:
- KYC Documents
- Policy document
- Identity proof (AADHAAR card, passport, etc.)
- Address proof (utility bills, bank statements, etc.)
4. Application Processing
The LIC branch will process your application and verify the submitted documents. This may involve checking your policy's surrender value and payment history to determine your loan eligibility.
5. Approval and Disbursement
Once approved, LIC will authorise the loan and release the funds according to the product terms. The original policy will be held by LIC until the loan is fully repaid.
Also Read: Apply for a Student Loan in India for UG Program
Minimal Docs, Maximum Approval - Apply Now
Terms and Conditions for Availing of a Loan Against LIC Policies
When applying for a loan against your LIC policy, it's crucial to understand the terms and conditions that govern the loan.
Here’s a comprehensive overview.
1. Prepayment Conditions
Borrowers can only prepay the loan after they have completed a minimum of 6 EMIs.
2. Minimum Loan Tenure
The minimum loan tenure is set at six months, meaning that shorter loan durations are not allowed.
3. Policy Maturity During Loan Tenure
If the policy matures while the loan is still active, LIC reserves the right to utilise the maturity proceeds to recover any outstanding loan amount and accrued interest.
4. Interest in Case of Policyholder's Demise
In the unfortunate event of the policyholder’s demise before the loan is fully repaid, interest will only be charged up until the date of death.
5. Eligibility for Loan
Loans are available only to holders of specific LIC policies, such as endowment plans, money-back policies, and whole-life plans, provided these policies have acquired the required surrender value.
6. Regular Interest Payments
Policyholders are required to pay interest regularly according to the agreed schedule. Failure to do so may lead to the foreclosure of the loan.
7. Loan-to-Value Ratio
LIC holds the right to terminate the policy if the outstanding loan amount, including interest, exceeds the policy’s surrender value.
Loan against the LIC policy option provides a flexible and secure way to access funds without disrupting your long-term financial planning. By leveraging the surrender value of eligible LIC policies, you can obtain a loan against the LIC policy to meet immediate financial needs while ensuring your investment continues to grow.
Take control of your education finances with Propelld! Our student-friendly loans offer quick approvals, flexible repayments, no collateral up to 50 lakhs, and a lot more!
.svg)
