Loan Against Life Insurance

A life insurance policy is a versatile investment option today. It not only provides protection cover but also gives an insured the benefit of availing a loan against the policy. However, you must bear in mind the following factors before buying a loan against life insurance policy:

Frequently Asked Question:

1. Which types of insurance policies can I get a loan against?

Not all life insurance policies provide a loan. You can typically get a loan against traditional life insurance policies, such as endowment and money back policies

2. How much can I borrow against my policy?

The loan amount depends on the surrender value of the policy. Typically, you can borrow up to 80% of the surrender value subject to terms & conditions and at the sole discretion of HDFC Life

3. What is the interest rate on these loans?

Interest rates for loans against insurance policies are currently 9.5% per annum (using the reducing balance method) and are subject to revisions every six months.

4. Are there any additional charges or fees?

HDFC Life doesn't charge any processing fees, foreclosure charges, partial payment fees or any other type of fee.

5. What happens if I don't repay the loan on time?

HDFC Life shall be entitled to deduct such outstanding amount together with all interest due up to the date on which the benefit amount under the policy becomes payable, from the policy money. The remaining balance, if any, shall be due and payable under the policy in accordance with the terms and conditions of the policy.

6. Is the loan amount taxable?

Loans against insurance policies are not taxable, as they are considered loans and not income.

7. Can I prepay the loan before the term ends?

Yes, you can prepay the loan without any charges and also can close the loan

8. Does taking loan against policy require credit score check

While taking loan against policy, there is no credit score check. Therefore no effects on your credit score. Low credit score customer can also get policy loans

9. How to apply for loan against policies?

Currently can be applied from the below 5 touch points-

• By login through our Virtual assistant "Elle" - https://hdlf.in/pe7CJq5
• On WhatsApp Chat BOT "Etty" - bit.ly/2MOBZOH
• Say Hi on WhatsApp Chat BOT "Etty"- +91 8291890569
• Reach out to us over call on 02262874200 for instant assistance
• Walk-in to our nearest HDFC Life branch. Locate us at Branch locator https://www.hdfclife.com/contact-us#BranchLocator

ARN-  ED/05/24/11833