INTERVIEW QUESTIONS LOAN LOAN AGAINST SECURITIES DETAILS

Question: Can I opt for a loan on my term life insurance plan?

Answer: To answer your question in one line, no you cannot opt for a loan against your term insurance plan. However you can get a loan if you have any other life insurance policy along with a term plan. Since a term plan does not have any cash value associated with it is difficult for any bank or NBFC to mortgage the life insurance policy as security and give out any sum against the policy. Life insurance plans like endowment policies, money back plans and unit linked insurance policies (ULIPs) are eligible for loans while term insurance plans are not eligible for any loans. It is always a good idea to check with your bank or life insurance service provider whether any insurance plan you have is eligible for a loan or not.

To answer your question in one line, no you cannot opt for a loan against your term insurance plan. However you can get a loan if you have any other life insurance policy along with a term plan. Since a term plan does not have any cash value associated with it is difficult for any bank or NBFC to mortgage the life insurance policy as security and give out any sum against the policy. Life insurance plans like endowment policies, money back plans and unit linked insurance policies (ULIPs) are eligible for loans while term insurance plans are not eligible for any loans. It is always a good idea to check with your bank or life insurance service provider whether any insurance plan you have is eligible for a loan or not. Source: CoolInterview.com

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