On the off chance that you need cash, you can take an individual advance. If you have a credit card, you can also spend on it. But you must know that the rate of interest on personal loans and credit cards is very high. Can also put you in big trouble.
Your LIC policy can be useful in such times, The vast majority have a couple of strategies of LIC.
In the event that I disclose to you that you can take an advance with your LIC strategy likewise, in what manner will you feel?Your interest rate will also be higher than a personal loan or credit card loan.
How much loan can you take with your LIC policy?
When you are going to apply for a loan, you can take a loan up to 90% of the Surrender value of your policy at that time. If you have made your policy Paid-up, then you can take a loan of up to 85% of the paid-up value. You probably paid your premium for at any rate three years.
What is the Surrender Value of your LIC strategy?
It is likewise important to know in light of the fact that the measure of your advance relies upon the Surrender esteem. Figuring it is somewhat dubious. You can locate this out by heading off to your specialist or closest LIC branch. The issue is that the Surrender estimation of your approach is not exactly your all out premium instalment. In the event that you have been an arrangement for a couple of years, at that point this worth can likewise be very low. So if you are expecting to take a big loan for your LIC policy, you may be disappointed. If you want to know about the calculation of this Surrender value, then you can read this post. But you do not have to work so hard, you will get this information from your agent or the nearest LIC branch.
How do you pay the loan?
You are very relieved here. Generally, you have to pay EMI every month in a loan. Since EMI has both principal and interest, the EMI is also large. If your financial situation is not good, it may be difficult to give EMI. There is no such issue in the advance of LIC strategy. You have to pay interest every 6 months. Principal You can fill up till the time your policy matures. In the event that you need, you can likewise fill it with intrigue. So just keep paying interest every 6 months. Your work will go on. If the borrower (s) dies or the policy matures, the LIC will recover the outstanding loan from the death benefit or maturity benefit. That means after deducting the loan amount, you (or your nominee) will return the remaining money.
How much interest has to be paid in LIC loan?
I think interest rate is not fixed. Keeps changing. The rate is currently running at 10.5%. But it can change. This financing cost can be lower than the loan fee of the individual credit you get. You can discover by heading off to your LIC specialist or closest LIC branch prior to taking a credit.
What happens if the loan is not paid?
You need to reimburse in the event that you have taken a credit. If you delay the payment of interest for more than thirty (30) days, then LIC can also surrender your policy. With that sum, he can recuperate the measure of your advance. Try not to be so.
How to take loan from your LIC policy?
You can fill the loan form and submit it to your agent or the nearest branch. If you are taking a loan from that policy for the first time, then you will have to fill Form 5196.If you are taking a loan from that policy again (that policy is in the name of LIC), then you will have to fill Form 5205.Now you can also apply online. This thing is mentioned below in this post.
- I have based my post on the terms and conditions of the LIC New Jeevan Anand (New Jeevan Anand) plan. Credit rules might be distinctive in some other arrangement.
- You can get the credit just in customary protection or gift extra security strategy.
- Loans are not available in ULIPs or term life insurance plans.
- You can expect that the advance will be accessible soon in light of the fact that it is accessible just with your cash. LIC does not have to take any risk.
- You can take a loan again on a policy. It can likewise happen that regardless of whether your first advance isn’t reimbursed, you can even now take a subsequent credit. However, the total outstanding loan amount cannot exceed 90% of your Surrender value.
- Apart from LIC, private insurance companies can also get loans from traditional life insurance policy.
- You will get a loan, it does not mean that you take a loan. Take a loan with the LIC policy only when necessary.
- You do not get any tax benefit to repay the loan of LIC policy.
- According to me, the interest rate of loan taken by LIC policy will be higher than the loan in your home. That is why a home loan will be a great option to get a home. You will likewise get tax breaks on home loan.
- You get a loan through LIC policy (traditional plan), it does not mean that you should buy such a policy. Avoid such insurance plans.
Founder & CEO| Fox Investor – Financial Blog Portal & A.V.A. Taxway Associates- Corporate & Tax Law Firm
Dr. Vibhor S Agarwal has a Ph.D. in IPR, start-ups, and corporate law, as well as an MBA in finance from NMIMS Mumbai, and achieved numerous certifications in corporate law. He is a practicing corporate lawyer and the founder of two business verticals. He has advised over 2000 businesses, 5000 students, and 400 new start-ups all over India and other countries like Dubai, London, the USA, and Qatar. Dr. Viibhor Agarwal assists people with business expansion and branding, regardless of size, as well as business setup, financial literacy, start-up guidance, licensing, tax planning, and other legal compliance issues. Dr. Viibhor Agarwal’s goal is to provide complete financial and business literacy to all businessmen who want to start new businesses and grow existing businesses and to those students who want to open their start-ups. In each video, Dr. Viibhor Agarwal not only explains the method of the solution but also advises subscribers on practical tips learned from and faced by clients handled by Dr. Viibhor Agarwal daily. This blog portal provides you with an easy and clear solution to your business problem, allowing you to take your business to the next level.