Loan Against Endowment
Insurance Policies..!
Loan
against endowment policies issued by Life Insurance Corporation of
India (LIC of India) can be availed after three (3) years of buying
the plans.
For
a sizable loan amount, the policy should be more than ten years old
and have a large annual premium, because the loan sanctioned is not
more than 50% to 60% of the premium already paid. The interest at the
rate of close to 10 % has to be paid every 6 month on the loan
amount. The advantage is that the interest charged is not as high as
those for loan against property or / personal loans.
The
other option is to surrender the policy if it is more than 5 years
old but the amount paid on surrender, minus the penalty, which may
eat into the initial capital invested.
Loan
against money back policies and those taken for children’s
education are not eligible for the purpose.
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