If you need money in the corona period, then you can also take a loan on an insurance policy, know the important things

Corona era: Crores of families are facing financial crisis. In difficult times, if you need money and you have an insurance policy, then you can take a loan on it. Loan is available more easily in lieu of insurance policy and interest is also reduced on it. You can take these loans through banks or non-banking financial institutions (NBFCs).

How much loan do i get

  • How much loan will be given depends on the type of policy and its surrender value.
  • Usually 80 to 90% of the surrender value of the policy (finally the amount received) can be availed.
  • However, you get this loan only when you have a money back or endowment policy.

Surrender value
On surrendering a life insurance policy before running for a full period, some part of the amount paid as premium is returned. Charges are deducted in it. This amount is called the surrender value.

Special things related to surrender value

  • Surrender value is refunded only in those policies in which investment along with insurance is also part of it.
  • There will be no surrender value in the pure term plan.
  • Plans like endowment, moneyback and ULIP have surrender value.
  • The surrender value will be refunded only if the premium has been paid continuously for two years. In many companies this limit is 3 years.


  • The interest rate on an insurance policy depends on the amount of the premium and the number of premiums paid.
  • The loan interest rate on life insurance varies between 10-12%.

If the loan is not repaid

  • An insurance policy will lapse if there is a default in the loan repayment or default in paying the premium.
  • The policyholder will also have to pay the premium in addition to the interest on the loan taken on the policy.
  • The insurance company reserves the right to recover the principal and outstanding interest from the surrender value of the policy.

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