Insurance

An insurance loan is a loan that is taken against the cash value of a life insurance policy. This type of loan allows policyholders to borrow money using their policy as collateral, typically at lower interest rates than unsecured loans.

Key Features of an Insurance Loan:

✅ Collateral-Based Loan – The loan is secured against the cash value of your life insurance policy.
✅ Lower Interest Rates – Interest rates are generally lower than unsecured loans.
✅ No Credit Check – Since the loan is backed by the policy, lenders do not usually require a credit check.
✅ Loan Limit – You can borrow up to a certain percentage of the policy’s surrender value.
✅ Flexible Repayment – You can repay the loan anytime, but unpaid amounts may be deducted from the final insurance payout.
✅ Risk of Policy Lapse – If the loan amount plus interest exceeds the policy’s cash value, the policy may lapse.

Types of Insurance Eligible for Loans:

• Whole Life Insurance – Allows borrowing against the accumulated cash value.
• Endowment Plans – Some savings-linked insurance policies offer loan facilities.
• Unit-Linked Insurance Plans (ULIPs) – Some ULIPs allow loans, but terms vary by insurer.

Would you like assistance in finding an insurance loan based on your policy type?