Loan against Insurance Policy FAQ

1. If the policy is in a lock-in period, a bullet interest payment will be made on completion of the policy lock-in period. A bullet repayment is a lump sum payment made for the entire outstanding dues under the loan.
2. If the policy is out of the lock-in period, the interest is calculated and payable monthly.
   In case of lock-in policies, compounding interest is to be charged.
   In case of lock-in free policies, simple interest to be charged.

It takes approximately 24 hours to process a loan against an insurance policy. This is subject to the submission of all required documents.

You need to present the following documents to avail of a loan against an insurance policy:

1. PAN card
2. Aadhaar card/ passport/ voter’s ID for address proof
3. Valid insurance policy document
4. Bank proof, such as bank account statement or cheque copy

No, you cannot convert the principal amount to EMIs.

Yes, there is an option for partial withdrawal during the subsistence of the loan. However, it is strictly subject to successful verification by the lender. Bajaj Finance holds the right to deny partial withdrawal requests at its sole discretion.

Yes, a policyholder with multiple ULIP policies can avail loan against all policies in one go. This is subject to the assignment of all the policies in favour of Bajaj Finance.

The policy has to be assigned in favour of Bajaj Finance Limited.

You can call the customer centre at 1800-123-2557 or write to us at Laip.care@bajajfinserv.in for any loan against insurance policy-related service requests.

All loans are processed by Bajaj Finance Limited.

In case the loan is availed, the policy will be assigned in favour of Bajaj Finance. There are two ways of closing the loan –

1. You can repay the the total outstanding in Bajaj Finance Limited designated bank account. Post receipt of payment, loan account shall be closed & policy will be assigned back to you.
2. You can repay via surrendering the policy. Basis you request insurance company will surrender the policy and the surrender value will be transferred to Bajaj Finance limited. Bajaj Finance will adjust the loan amount, refund the surplus (if any) to you and close the loan account.

Policy surrender will be at the discretion of the lender only.

Any intimation regarding premium payments is sent directly to the client by the insurance company.

Loans are typically available against traditional endowment and ULIP policies that have acquired a surrender value. Pure term insurance plans do not qualify because they do not build a cash value that can be pledged.

The loan amount is usually based on the policy’s surrender value. Lenders offer a percentage of this value as the loan-to-value (LTV). The higher the surrender value, the higher the eligible loan amount.

Yes, you can pledge more than one eligible policy if each has a measurable surrender value. The loan amount for each policy is assessed separately based on its value and combined for total eligibility.

Interest is generally charged on the outstanding loan amount on a monthly or annual basis, depending on the lender’s terms. The rate may vary based on market conditions and the surrender value’s stability.

Yes, premium payments must continue to keep the policy active. If premiums lapse, the policy may convert to paid-up status, affecting surrender value and potentially increasing the risk of the loan exceeding policy value.

You can repay the loan by clearing the outstanding principal and accumulated interest at any point. Once fully repaid, the assignment is cancelled, and the policy returns to your complete control.

If the accumulated interest and outstanding loan amount exceed the surrender value, the insurer may terminate the policy. The policy’s value is used to settle dues, leaving no remaining benefits for the policyholder.