Loan against Insurance Policy features and benefits

Read on to know why our Loan against Insurance Policy is the best option for you.

Features and benefits of loan against insurance policies

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All you need to know about our loan against insurance policy

Watch this video to know more about the key features of our loan against insurance policy.

  • Loans up to Rs. 25 crore*

    Finance a diverse range of needs with funds up to Rs. 25 crore* against your endowment and ULIP policies.

  • Funding against policies under lock-in period

    We cover your immediate liquidity needs even if the insurance policy is under lock-in period.

  • Get loan while keeping your insurance coverage intact

    Get loans against your endowment and unit-linked insurance policy to meet your liquidity needs without having to surrender your policy. So, your insurance coverage and investment benefits remain intact.

  • Flexi loan against endowment and ULIP policies

    Get a flexi loan against a Unit Linked Insurance Plan (ULIP). Make multiple withdrawals from your total sanctioned amount and pay interest only on the amount utilised. Get a flexi loan against an endowment and Unit Linked Insurance Plan (ULIP). Make multiple withdrawals from your total sanctioned amount and pay interest only on the amount utilised.

  • Pay interest on completion of policy lock-in period

    For loan against policies which are under lock-in period, you can repay the principal and interest amount together after the completion of the lock-in period.

  • Pre-approved loan limit

    Pre-approved loan limit

    Get a minimum loan of Rs. 10,000 and maximum of up to Rs. 25 crore. This is applicable for the maximum tenure of up to 96 months. Get loan of up to 90% on policies against surrender value.

  • Easy prepayments

    Flexible prepayment and foreclosure options let you prepay or foreclose your loan at no additional charges.

  • Apply with minimal documents

    You only need to submit Officially Valid Document (OVD) for ID and address proof, bank account proof, and document proof of the insurance policy to apply for a loan.

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Frequently asked questions

What is loan against insurance policy?

If you need some financial help and looking for availing a loan, you can get a loan against your insurance policy. In this case, your insurance policy acts as the collateral against the loan amount.

Can we take loan against insurance policy?

The eligibility criteria for taking a loan against your insurance policy is relaxed compared to other types of loan. It depends on the type of insurance policy you own and whether it is approved for loan by the lender. Unit-linked plans, endowment plans, and money-back plans are some of the life insurance plans against which the loan can be availed.

What are the processing charges levied by Bajaj Finance Ltd. on the loan against insurance policy?

A processing fee up to 3% (inclusive of applicable taxes) of the loan amount or up to Rs. 10,000 (inclusive of applicable taxes).

When is the interest payable on the loan against insurance policy and how is it calculated?

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.

How much time does it take to process a loan against insurance policy?

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

What are the documents required to get a loan against insurance policy?

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

Is the principal amount convertible to EMI?

No, you cannot convert the principal amount to EMIs.

Is partial withdrawal allowed during the subsistence of the loan?

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.

Can a policyholder with multiple ULIP policies, avail loan against all policies in one go?

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.

To whom will the policy be assigned, if one decides to get a loan against insurance policies?

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

Whom should the customer contact for a service request?

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.

Is the loan processing done by Bajaj Finance or its partner insurance companies?

All loans are processed by Bajaj Finance Limited.

What will be the effect of foreclosure of a loan against an insurance policy?

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 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.

Who can surrender the policies against which loans have been availed?

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

Who initiates the communication for premium payment details?

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

What are the advantages of a loan against insurance policy?

The advantages of availing a loan against an insurance policy include lower interest rates, quick disbursal, and the paperwork required is minimal.

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Disclaimer:

* Sanctioning of Loan shall be at sole discretion of Bajaj Finance Limited

**Fees are subject to sole discretion of Bajaj Finance Limited and regulatory guidelines.