Loan Against Insurance Policy for Higher Education

Investing in your child's education for the future is of utmost importance. But with the increasing cost of education, students and their parents often struggle to pay for the fees. In addition to tuition fees, there are various other expenses such as visa fees, travel costs, course fees, living expenses, study materials, and emergency funds that contribute to the overall cost. This is where our loan against insurance policy can be advantageous. By using your insurance policy as collateral, you can avail a loan to secure the funds needed to support your child's educational aspirations.



One of the significant expenses associated with higher education is tuition fees. Moreover, certifications can enhance the value of a course and contribute to career advancement. You can fund the supplementary course fees, ensuring that your child seizes all available opportunities without any setbacks.



The opportunity to study abroad is exciting, but it also has its own costs. For your child to pursue higher education abroad, proper documentation and visa processing are required. It also covers the cost of visas and flights, so you don’t need to worry about these expenses.



At the time of pursuing higher education, unexpected circumstances can emerge abruptly, such as health complications, travel complications, or other unanticipated costs. It is important save money specifically for these unforeseen situations.



When a student starts their college life, and if they are away from home, the list of expense just goes up. Rent serves as just the initial component of living expenses, as there are numerous other daily expenditures to consider. Essential items like food, transportation, mobile expenses, internet charges, and other miscellaneous items can quickly add up and contribute to the overall cost of living.



Course materials such as books, study resources, and journals can be quite costly, particularly for specialised fields like medicine and engineering. You can also reduce the concerns about handling the expenses of educational materials for your child's studies.

Features and benefits of loan against insurance policies


How to apply for a Loan against Securities

If you're looking to apply for a loan against the securities you own, follow the simple steps mentioned in this video

  • Loans up to Rs. 25 crore *

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

  • 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

    Get a minimum loan of Rs. 10,000 and maximum of up to Rs. 25 crore. This is applicable for a minimum tenure of 7 days and a maximum of 96 months.

  • 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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Eligibility criteria and documents required

You can apply for our loan against insurance policies online if you meet the basic criteria mentioned below*. After meeting the criteria, you will need a set of documents to complete your application process.

Eligibility criteria

  • Age: 18 to 65 years
  • Minimum surrender value of policy: Rs. 30,000
  • Employment: salaried or self-employed
  • Must have an active ULIP policy of either Bajaj Allianz Life, ICICI Prudential, Max Life, TATA AIA, or Aviva India
  • Nationality: Indian

Documents required**

  • One copy of your recent photograph
  • Aadhaar card/ passport/ voter’s ID as address proof
  • PAN card
  • Insurance policy document
  • Bank account statement/ copy of a cheque as bank account proof
  • Any other document as may be required by Bajaj Finance Ltd.

**Please note that the list of documents mentioned here is indicative. You will be notified on the complete list of documents required by our representative while filling the application form.

How to apply for a loan against insurance policy

Video Image 00:44

A step-by-step guide to apply for loan against insurance policy

Step 1: Click on ‘Apply’ at the top of this page to open our online application form.
Step 2: Enter your name, email ID, and mobile number.
Step 3: Under ‘Type of Security’, select Insurance Policy and provide your surrender value.
Step 4: Select your city of residence and after agreeing to the terms and conditions, click ‘Submit’.

You will receive an OTP on the mobile number for verification. Enter the OTP to submit the form.
Once your application form is submitted, our representatives will get in touch with you for further proceedings.
Disbursement shall be done post complying with sanction terms, successful verification of Application and policy assignment.

  • Did you know?

    You can get a loan against your policy still under lock-in period

  • Did you know?

    You can access funds while keeping your insurance cover intact

  • Did you know?

    You can avail loan against insurance policy with minimal documentation

  • Did you know?

    You can pay interest only on amount utilised

Applicable fees and charges

Types of fees

Charges applicable

Processing fees

Up to Rs. 1,00,000/- (inclusive of applicable taxes)

Prepayment charges

Full prepayment - Up to 4.72% (inclusive of applicable taxes) on the outstanding loan amount as on the date of full pre-payment

Part prepayment - Up to 4.72% (inclusive of applicable taxes) of the principal amount of Loan prepaid on the date of such part Pre-Payment

Annual maintenance charges

Up to Rs. 2,950/- (inclusive of applicable taxes) to be collected on renewal

Bounce charges

In case of default of repayment instrument, Rs. 1200/- per bounce will be levied

Penal interest

Delay in payment of Monthly instalment shall attract penal interest up to 3% per month on the Monthly Instalment outstanding, from the respective due date until the date of receipt

Stamp duty

Payable as per state laws

Legal charges

At actuals

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. Loan against Insurance Policy is given only against Unit-linked plans (ULIPs).

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

A processing fee of Rs. 1,180 (inclusive of applicable taxes) is applicable for loans below Rs. 1 lakh. For loans above Rs. 1 lakh, a processing fee of Rs. 1,475 (inclusive of taxes) is applicable**.

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 entirety of an outstanding dues under the loan amount at maturity.
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. One copy of your recent photograph
  2. PAN card
  3. Aadhaar card/ passport/ voter’s ID for address proof
  4. Valid insurance policy document
  5. 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 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 and policy will be assigned back to you.
2.You can repay is repaying via surrendering the policy. Basis your request, the insurance company will surrender the policy and the surrender value will be transferred to Bajaj Finance Ltd., since the policy is assigned to them. Bajaj Finance will adjust s the loan amount and refund the surplus (if any) to the 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.

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