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Can I get a loan against my term insurance plan | FAQ #30

Last Updated: Nov 30, 2017 | 1,913 Views
NO. You cannot get a loan against your term insurance plan. 

So how and when does a person get a loan against their insurance policy? Loans are provided against insurance policies which are investment oriented - where you invest your money regularly and a corpus gets built with the insurance company. The company will pay this money to you only at the time of maturity - but they will offer a loan against a small part of your savings by charging you an interest. The insurance company is actually at no risk and you get a rate of interest which is lower than what is available in the market.

Since there is no savings component at all in term insurance plan - all your money is used to provide you the life cover - there is no corpus to give you a loan.

Anyway, insurance policies should not be taken for the purpose of taking a loan against it - that is one costly move.

Take a term insurance plan to protect your family against some unfortunate incident which may result in the loss of life of the income generator. Start now by comparing the best term insurance plans.

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