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Loan Against Life Insurance

Loan Against Life Insurance
May 15, 2024


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. A low rate of interest is charged for loans against life insurance policy. Further, the policy value remains unchanged. However, you must bear in mind the following factors before buying a loan against life insurance policy:

Are you eligible?

Not all life insurance policies provide a loan. You will be allowed to take a loan against the surrender value of permanent or whole life insurance but not against term insurance plan. Further, the policy is eligible for loan once the policy acquires the surrender value.

Your application and the documents might be reviewed and sent for the approval; to avail loan against your own policy also your credit ratings might be considered.

Amount of loan

You will have to check with the company on the amount of loan you are eligible for. The loan amount is a percentage of its surrender value. It can be upto 80% of the surrender value.

Rate of interest

The Current Rate of Interest rate is 9.5% pa.


You don't need to submit any documents unless specifically requested by the lender during the application process.


You will continue to pay premiums even after availing loan, depending on the remaining PPT of the policy.

Loan repayment

Upon repayment of the entire loan amount in full, with applicable interest and charges, the policy shall no longer be assigned to lender and shall be automatically re-assigned to the Borrower.

The Borrower has to repay the loan in monthly instalments or as per the repayment cycle of the loan amount and at the interest rate applicable as specified. Mostly the repayment period is 12 month & maximum loan term is policy term less 1 then month.

HDFC Life offers various term insurance plans for the exclusive financial benefits of your loved ones. For details, click on the mentioned link: https://www.hdfclife.com/term-insurance-plans.

ARN- ED/04/24/11076
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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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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.