This facility is also available for Guwahati, Cuttack, Patna, Pune, Nagpur, Ahmedabad, Surat, Goa, Vadodara, Shimla, Ludhiana, Chandigarh, Jaipur, Ernakulam, Madurai, Coimbatore, Trivandrum, Indore, Lucknow, Bangalore and Visakhapatnam. While taking an insurance policy, you must enquire whether the plan carries the loan facility or not. Loan on policies where the policy document is lost or destroyed is granted only after a duplicate policy has been issued. It usually moves with the Bank rate. Even though the conditions of loan provide for compounding of interest half-yearly, in actual practice LIC adopts the practice of charging only simple interest.
Compound interest is charged where two half-yearly instalments of interest remain unpaid.
The policyholder is free to take loan on a policy any number of time during its currency except that the loan amount cannot be less than Rs 150 . Loan can also be raised for the purpose of payment of premiums under a policy . While granting an additional loan, the interest which has become due on previous loans is deducted out of the fresh loan. Loan is admissible even when the policy is not in force. But if the policy is lapsed for a long time and there is no intention to revive it, it is better to surrender it and take away the money rather than raising loan on it.