Which Companies Offer Loans Against Life Insurance Policies?

In India, various companies offer a loan against your life insurance policy. If you want to know how to get a loan against your HDFC Life policy, a loan against your Bajaj Allianz policy, or a loan against your PNB MetLife policy, you should be aware of the different terms and conditions offered by each company. Among the major ones that provide loans against insurance policies are SBI Life, HDFC Life, Kotak Life, and Max Life. This page gives you a list of all the companies that provide this facility along with their standout features.

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What are the Companies Offering Loan Against Life Insurance Plans?

A number of major insurance companies offer loans against life insurance policies that have a surrender value. Here's a summary of the main providers:

HDFC Life
Policyholders can apply for an HDFC Life loan against policy once the policy builds sufficient surrender value. Many customers prefer applying for a loan against HDFC Life policy online, making the process convenient. The insurer also allows structured repayment options, and HDFC Life loan against policy payment terms depend on the type of plan and accumulated value.
SBI Life Insurance
You can use the SBI Life loan against policy feature with both traditional and participating savings plans. The loan amount is usually a percentage of the surrender value, and it must be paid back with interest within the time limit.
Bajaj Allianz Life Insurance
You can get a loan against your Bajaj Allianz policy if you have an endowment or money-back plan that meets the requirements. This choice helps policyholders meet their short-term financial needs without having to cancel their insurance.
Max Life Insurance
Customers can apply for a loan against Max Life insurance policy if the plan has acquired surrender value. The approved loan amount depends on the policy value and insurer guidelines.
Aditya Birla Capital Life Insurance
Both loan against policy Aditya Birla and Aditya Birla Capital loan against policy options are available for qualifying savings plans. The loan percentage and interest rate vary based on policy type and tenure.
Kotak Life Insurance
A loan against Kotak Life insurance policy can be availed if the policy has built sufficient surrender value. The insurer determines the maximum loan amount based on the policy’s accumulated value.
PNB MetLife Insurance
Policyholders may opt for a loan against PNB MetLife policy on traditional plans that meet eligibility criteria. The facility gives you cash flow while keeping the policy active.

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How Loan Against Life Insurance Policy Works?

Understanding the structure of this facility helps avoid confusion later. Here’s how it typically functions:

Surrender Value Requirement
Your policy must acquire surrender value before becoming eligible for a loan. This usually happens after paying premiums for 2–3 years.
Loan Amount Calculation
The insurer allows a percentage of the surrender value as the loan amount, typically between 80% and 90%.
Interest Application
Depending on the rules of the insurer and the terms of your policy, interest is charged once a year or once every six months.
Policy as Collateral
The life insurance policy itself acts as security for the loan, meaning no additional collateral is required.
Impact on Benefits
The life insurance policy itself serves as collateral for the loan, so there is no need for any other collateral.

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Eligibility Criteria for Loan Against Life Insurance Policy

While conditions differ slightly across insurers, most companies follow similar guidelines:

Active Policy Status: The policy must be active and not lapsed at the time of loan application.
Minimum Premium Payment Period: A certain number of premiums must be paid before the policy gains surrender value.
Eligible Policy Type: Only traditional, participating, endowment, or money-back plans qualify. Regular term insurance plans usually do not offer this facility.
Policy Ownership Proof: The applicant must be the policyholder or legally assigned holder.
Valid KYC Documentation: Identity proof, address proof, and policy documents are required during processing.

Advantages of Taking a Loan Against Life Insurance

Many policyholders prefer this option over personal loans for the following reasons:

Lower Interest Rates: Compared to unsecured personal loans, interest rates are usually lower.
No Credit Score Dependency: Approval depends more on policy value than on credit history.
Quick Disbursement: Since the policy is already with the insurer, processing is usually faster.
Continued Insurance Coverage: Your life cover continues as long as premiums and interest are paid.
Flexible Repayment Options: Some insurers allow partial or full repayment before maturity.

Is Loan Against Life Insurance Policy a Good Option?

Taking out a loan against life insurance policy is a good option for the following people:

You need short-term liquidity.
You want to avoid high-interest personal loans.
You do not want to surrender your policy.
You require funds quickly.
You have built sufficient surrender value.

But it shouldn't take the place of structured financial planning. Always check the interest rates and your ability to pay back the loan before moving forward.

Wrapping it Up!

If you need money quickly, taking out a loan against your life insurance policy might be a good option. But it's important to carefully compare the options that different insurers, like HDFC Life, Bajaj Allianz, SBI Life, and others, offer. Because each company has different terms, interest rates, and requirements for who can borrow money, it's important to know these things so you can choose the best option for you. Before you make a decision, always check the loan amount, repayment terms, and interest rates. These will affect your financial future and the benefits of your policy.

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FAQs

Q: 1. Is loan against Bajaj Allianz policy available on all plans?

Ans: A loan against Bajaj Allianz policy is generally available on traditional and savings plans that have built surrender value. Pure term plans usually do not qualify.
Q: 2. What is the process for SBI Life loan against policy?

Ans: You need to make sure that your policy has enough surrender value before you can apply for an SBI Life loan against it. Fill out the loan application form, send in the necessary documents, and agree to the terms of the loan, including the interest rate and repayment schedule.
Q: 3. Can I get a loan against Max Life insurance policy easily?

Ans: Yes, a loan against Max Life insurance policy can be availed if your plan has accumulated surrender value. The loan amount depends on a percentage of that value.
Q: 4. What are the leading insurers and banks in India offering loans against life insurance plans?

Ans: Top insurance companies in India, including HDFC Life, LIC, ICICI Prudential, SBI Life, Pramerica Life, and Max Life, provide loans against ULIP and traditional life insurance policies. Banks like ICICI Bank, HDFC Bank, and Bank of Baroda also provide these policies.
Q: 5. Can I get a loan against a life insurance policy?

Ans: Yes, you can get a loan against a life insurance policy if it has acquired surrender value. This facility is usually available on traditional, endowment, or money-back plans. Pure term insurance plans typically do not qualify.
Q: 6. Which life insurance is best to borrow against?

Ans: Savings-oriented policies like endowment or participating plans are generally best for borrowing because they build cash or surrender value over time. The higher the surrender value, the higher the loan amount that can be borrowed.
Q: 7. Who is eligible for loan against policy?

Ans: The policyholder is eligible if the policy is active, has completed the minimum premium payment period, and has accumulated surrender value. Valid KYC documents and ownership of the policy are also required.

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˜The insurers/plans mentioned are arranged in order of highest to lowest Sum Assured(SA) offered by Policybazaar’s insurer partners offering term insurance plans on our platform, as per ‘first year premium of life insurers as at 31.03.2025 report’ published by IRDAI.

Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. For complete list of insurers in India refer to the IRDAI website www.irdai.gov.in

Rs. 400/month is starting price for a 1 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

Rs. 400/month (Rs.13/day) is starting price for a 1 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 230 is starting price for a 50 lakhs term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

+Rs. 8/day is starting price for a 50 lakhs term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

+Rs. 12/day is starting price for a 75 lakhs term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

+Rs. 497/month is starting price for a 1.5 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 487/month is starting price for a 2 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 626/month is starting price for a 3 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 905/month is starting price for a 5 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. ₹361/month is the starting price for a ₹1 crore loan cover with an 8% interest rate for an 18-year-old male, non-smoker, with no pre-existing diseases, loan tenure up to 20 years, rounded off to the nearest 10

+Rs. 1,267/month is starting price for a 7 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

*The full refund of premium is available on availing the one-time option of refund of premium. Total premium paid for policy (paid for add-ons) will be the special exit value, payable on availing the one-time option of refund of premium if you wish to completely exit the policy.

+Rs. 447/month is starting price for a 1 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs.679/month is starting price for a 2 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 910/month is starting price for a 3 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 1,374/month is starting price for a 5 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 1,924month is starting price for a 7 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

Women

+Rs. 400/month is Starting price for a 1 crore term life insurance for an 18 year-old Female, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

Rs. 461/month is the starting price for a 1 crore term life insurance for an 24 year-old female, non-smoker, with no pre-existing diseases, cover upto 54 years of age.

1,642/month is the starting price for a 1 crore term life insurance for an 44 year-old female, non-smoker, with no pre-existing diseases, cover upto 74 years of age.

Prices offered by the insurer are as per the approved insurance plans | #All savings and online discounts are provided by insurers as per IRDAI approved insurance plans | Standard Terms and Conditions Apply | **Tax Benefits are subject to changes in tax laws.| Policybazaar Insurance Brokers Private Limited

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