Loan against ULIP Policy: All you need to know
Table of Content
In this policy, the investment risks in the investment portfolio is borne by the policyholder
It’s the dual benefit of life insurance and investment opportunity that has made Unit Linked Insurance Plans (ULIP) quite a rage among investors. But wait, did you know you can avail of a loan against your ULIP policy too? With a set of simple formalities, availing a loan against the ULIP can be an easy choice if you face a sudden financial difficulty or an emergency.
Before getting into the details of the loan, let us start with what exactly a ULIP policy is? A Unit Linked Insurance Plan combines the facilities of a life insurance and an investment avenue. A part of the premium builds the life cover while the rest is invested in a portfolio of either equities or bonds or a mix of the two, based on the financial goals and risk appetite of the policyholder. If with time, his/her priority, life goals or risk tolerance changes, ULIP offers the fund switch option for restructuring and reallocation of the investment.
In the course of the policy term, if you need a loan to meet an emergency need or fund an essential financial requirement, the same can be availed of against the surrender value of your ULIP. Thus, you need no collateral and get access to the money immediately.
How to get a loan against ULIP?
Getting a loan against your ULIP policy requires a few easy steps.
Check the website for the eligibility criteria which depends on the policy tenure, surrender value and outstanding premiums (if any).
The maximum loan amount that can be sanctioned is a certain percentage of the surrender value of your policy. The company assesses the fund structure of your portfolio and the surrender value to arrive at the figure.
Once you are eligible for the loan, apply online, along with the relevant documents like the policy papers, identity and address proofs etc.
The insurer reviews the application and documents and sends the approval. Afterwards, the loan amount is immediately disbursed to your specified account.
Benefits of getting a loan against your ULIP
There are certain plus points of taking a loan against your ULIP policy. They are:
Faster disbursement:
With no collateral requirement and loan sanctioned against the surrender value of the policy, the disbursement is smooth and quick.
Retaining the policy:
Unlike assets, you don’t need to surrender your policy to get a loan. Thus, the benefits of the policy are still available to you while you utilise the loan to meet your urgent financial needs.
Flexible repayment:
A loan against the ULIP policy allows you to choose a repayment tenure according to your convenience. Hence, there’s no financial pressure.
Affordable interest rates:
Available against your ULIP policy, this loan comes with low and competitive interest rates, making it an affordable bet.
Easy prepayment:
The insurance companies don’t charge a penalty if you wish to complete the repayment of your loan before the scheduled time. That saves you from paying unnecessary interest.
The benefits and the easy disbursal make the loan against the ULIP policy a convenient and comfortable choice. If you have a ULIP policy and need to meet a financial urgency, you know what to do!
Related Articles:
- ULIP Plan Charges You Must Know
- Different Types of ULIP Funds in India
- How to Withdraw ULIP Policy?
- 6 Tips to Maximize your Gains from ULIP
- Understand how a ULIP calculator works
- ULIPs - Must you invest in them?
ARN - ED/10/23/5928
Term Plan Articles
Investment Articles
Savings Articles
Life Insurance Articles
Tax Articles
Retirement Articles
ULIP Articles
Subscribe to get the latest articles directly in your inbox
Health Plans Articles
Child Plans Articles
Popular Calculators
Here's all you should know about life insurance.
We help you to make informed insurance decisions for a lifetime.
HDFC Life
Reviewed by Life Insurance Experts
HDFC LIFE IS A TRUSTED LIFE INSURANCE PARTNER
We at HDFC Life are committed to offer innovative products and services that enable individuals live a ‘Life of Pride’. For over two decades we have been providing life insurance plans - protection, pension, savings, investment, annuity and health.
The Unit Linked Insurance products do not offer any liquidity during the first five years of the contract. The policyholders will not be able to surrender or withdraw the monies invested in Unit Linked Insurance Products completely or partially till the end of fifth year
For more details on risk factors, associated terms and conditions and exclusions please read sales brochure carefully before concluding a sale. Unit Linked Life Insurance products are different from the traditional insurance products and are subject to the risk factors. The premium paid in Unit Linked Life Insurance policies are subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. HDFC Life Insurance Company Limited is only the name of the Insurance Company, The name of the company, name of the contract does not in any way indicate the quality of the contract, its future prospects or returns. Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document of the insurer. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns.
Popular Searches
- Term Insurance Calculator
- Investment Plans
- Investment Calculator
- Investment for Beginners
- Best Short Term Investments
- Best Long Term Investments
- 5 year Investment Plan
- savings plan
- ulip plan
- retirement plans
- health plans
- child insurance plans
- group insurance plans
- income tax calculator
- bmi calculator
- compound interest calculator
- income tax slab
- Income Tax Return
- what is term insurance
- Ulip vs SIP
- tax planning for salaried employees
- HRA Calculator
- Annuity From NPS
- Retirement Calculator
- Pension Calculator
- nps vs ppf
- short term investment plans
- safest investment options
- one time investment plans
- types of investments
- best investment options
- best investment options in India
- Term Insurance for Housewife
- Money Back Policy
- 1 Crore Term Insurance
- life Insurance policy
- NPS Calculator
- Savings Calculator
- life Insurance
- Gratuity Calculator
- Zero Cost Term Insurance
- critical illness insurance
- itc claim
- deductions under 80C
- section 80d
- Whole Life Insurance
- benefits of term insurance
- types of life insurance
- types of term insurance
- Benefits of Life Insurance
- Endowment Policy
- Term Insurance for NRI
- Term Insurance for Women
- Term Insurance for Self Employed
- Benefits of Health Insurance
- Health Insurance for Senior Citizens
- Health Insurance for NRI
- Best Term Insurance Plan for 1 Crore
- personal accident insurance
- Annuity Calculator
- term insurance plan