Everyone has to face difficult economic situation at some point or the other. Crores of families are facing financial crisis during the Corona period. At such a time, the most lack of money is felt. In such difficult times, your insurance policy can be very useful for you as a loan can be taken on it.
how much loan do you get
- How much the loan will be available depends on the type of policy and its surrender value.
- Usually 80 to 90% of the surrender value of the policy (final amount) can be availed .
- However, you get this loan only if you have a money back or endowment policy.
Special things related to surrender value
- Refund of Surrender Value is available only in those policies in which insurance is included as well as investment.
- There will be no surrender value in Pure Term Plan.
- Endowment Plans like , 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.
- Interest rate on insurance policy depends on the amount of premium and number of premiums paid.
- The interest rate on loan against life insurance varies between 10-12%.
- Default in repayment of loan or default in payment of premium will result in lapse of the insurance policy.
- The policyholder will have to pay premium on the loan taken against the policy in addition to interest.
- The insurance company reserves the right to recover the principal and outstanding interest amount from the surrender value of the policy.