Loan Against Life Insurance Policy: LAS on Insurance

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Loan Against Insurance Policy

Need quick funds without selling your assets? A loan against insurance policy lets you borrow money by using your life insurance policy as collateral. It’s a simple, low-risk way to access liquidity when you need it most, without losing insurance coverage.

Fast access to funds:

Get approval and disbursal within days.

Flexible repayment:

Pay interest monthly and repay principal anytime during the policy term.

No need to surrender your policy:

Your policy stays active as long as premiums are paid.

Lower interest rates:

Compared to personal loans or credit cards.

Continued life cover:

Your policy protection continues without interruption.
Borrowing against life insurance is a smart way to unlock funds while keeping your financial plans intact.

Revision of Reference Rates for determining Interest Rates on loans given

Credit Score

A high credit score signals reliability to lenders and can help you get lower personal loan interest rates.

Existing Debt Obligations

High existing debt can lead to higher interest, as lenders see more risk in lending to heavily indebted borrowers.

Income and Employment Stability

Stable income and employment history make you eligible for personal loans with low interest rates, as lenders perceive lower risk.

Lender Policies

Different banks and NBFCs have varying interest rate structures, so comparing offers helps identify the personal loan minimum interest rate available to you.

Loan Amount and Tenure

Larger loans or longer repayment tenures may attract slightly higher personal loan rates due to increased risk.

Eligibility Criteria and Documents Required

Who Can Apply:

Policyholders with eligible life insurance policies with surrender value.
Applicants must be 18 years or older.
Policies must be in force (not lapsed).

Required Documents:

Duly filled loan application form
Original life insurance policy document
Valid photo ID (Aadhaar, PAN, Passport)
Address proof (utility bill, Aadhaar, etc.)
Bank statement or cancelled cheque
Assignment of policy to the lender

Applicable Fees and Charges

Fee Type	Amount / Rate
Processing Fees	₹500 – ₹1,000 or as per lender policy
Interest Rate	Typically 9% – 12% per annum
Foreclosure Charges	Nil or nominal
Late Payment Penalty	As per policy terms
Documentation Charges	May apply based on lender guidelines

Always check current rates before applying for a policy loan on life insurance.

How to Apply for a Loan Against Insurance Policy

Check eligibility:

Ensure your policy qualifies and has adequate surrender value.

Collect documents:

Keep ID, address proof, and the policy ready.

Visit branch or apply online:

Submit the loan form through your insurer or authorized lender.

Assign your policy:

Legally transfer rights of the policy to the lender.

Customer Satisfaction Stories

Don’t just take our word for it. Hear from our customers about their successful financial journey with us

Mr. Hiralkumar Ashokbhai Patel

Aditya Birla Finance Customer

The digital platform and whatsapp service of ABHFL gives me a quick access to my basic loan details such as statement of accounts, loan account details, interest certificate, and repayment schedule.