Loan Against INSURANCE POLICIES
Insurance policies are often associated with providing financial protection in times of need. However, what if you could leverage the value of your insurance policy to meet immediate financial requirements without losing the coverage it provides? Loans against insurance policies offer a unique opportunity for policyholders to access funds while keeping their insurance intact. In this blog post, we will delve into the concept of loans against insurance policies and how they can provide a valuable financial resource when needed.
Instant LAIP limit within minutes
Interest rate at 10% p.a. (FLAT)
Large list of approved insurance policies
100% Digital Process
Feature and Benefits
Loans against insurance policies, also recognized as collateral-based lending, entail using your insurance policy as security to obtain a loan from a financial institution. Instead of surrendering your policy, which may hold potential for future benefits, you maintain ownership while accessing the funds you need. The loan amount is typically evaluated based on the value and terms of the insurance policy being pledged.
Online KYC on Digilocker 
No CIBIL Check
Online OTP based pledge process 
ROI at 10% (Flat) p.a 
Retain ownership
Flexible use of Fund 
Loan against long lists of insurance policies
Loan amount Min Rs 10,000-Max Rs 10,00,000
There are no charges 
Maximum tenure of loan is 12 months
Advantages of Loans Insurance Policies
Retain Investment Growth
By opting for a loan against insurance policies, policyholders can sustain potential policy growth and accrued benefits. This approach safeguards the long-term potential and financial growth embedded within their insurance policies.
Lower Interest Rates
Loans secured by insurance policies often come with lower interest rates compared to unsecured loans or credit card advances. The insurance policy acts as collateral, reducing the risk for the lender, which translates into more favourable terms for borrowers.
Quick and Convenient Process
Applying for a loan against insurance policies is typically a streamlined and hassle-free process. Since the insurance policy already exists, the documentation requirements and approval process can be expedited, resulting in faster disbursal of funds.
Flexibility in Loan Amount and Tenure
The loan amount available against insurance policies is determined by the value of the pledged policies. This allows borrowers to access a significant portion of their policy's value, offering financial flexibility. Additionally, borrowers can choose a repayment tenure that suits their needs and repayment capacity.
How to Apply
- 1 Type of Loan and Apply
- 2 Complete KYC registration with PAN & Aadhar details
- 3 Pledge securities as collateral for secured loans
- 4 Verify your bank account online via e-mandate
- 5 Read & Sign loan agreement online with OTP authentication
- 6 Get Loan in your Bank account
How to Apply
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Frequently asked questions
Loan against insurance policy is a financial optional available to the policyholders of life insurance policies. These policies accumulate a cash value over time, which policyholders can use as a collateral to borrow against.
The loan amount is equal to 80% of the surrender value of the policy. At Lark the maximum loan amount is the 80% surrender value or Rs.1000000 whichever is lower.
When a policyholder takes a loan against their policy, the insurance company uses the cash value as collateral. This, means that the death benefit of the policy is reduced by the outstanding loan amount. If the policyholder passes away before repaying the loan, the insurance company will deduct the loan balance from the death benefit paid to the beneficiaries.
At Lark, loan against insurance policy can be given for a maximum tenure of 12 months and the repayment will be on EMI based model.
No, policy loans are not available for all types of insurance policies. Term life insurance policies do not accumulate cash value and therefore are not eligible.
The borrower must be a resident of India.
He must be between 18-65 years of age.
The borrower must hold a valid insurance policy having a surrender value of at least Rs.20000.
The policy should be held in the digitalised form.