Most people take life insurance policies in today’s times, hoping to offset future financial shocks. Life insurance policies help protect the policy holder’s family against economic uncertainty arising out of abrupt loss of income. Life insurance can yield another valuable benefit: it can be used to generate requisite funds in lieu of a Loan Against Life Insurance Policy (LAIP).
Why Loan Against Life Insurance Policies (LAIP)?
Loan Against Life Insurance Policies offers customers the opportunity to leverage their existing life insurance policies and generate cash reserves quickly. This is a beneficial facet of life insurance, which helps you liquidate an existing policy (ies) to beget funds for professional or business purposes. It is pertinent to note that the loan is approved only against traditional life insurance models that include endowment and money back features. It is not granted against term insurance, but we approve the LAIP for unit-linked insurance policies.
Also, not all life insurance plans qualify for personal loan against insurance policy. Aditya Birla Finance approves LAIP only for Life Insurance policies that have attained their surrender value at the time of application of the loan.
Is Loan Against Life Insurance Policies (LAIP) for you?
If you require funds without conceding your other movable and immovable assets or monetising your equity investments, then it is advisable to explore the Loan Against Life Insurance Policies (LAIP) option. It is an excellent tool to monetise a long-term financial security instrument for the short term. Additionally, you do not need to surrender the policy to avail of the loan against policy. The borrower still accrues benefits and bonuses from the life insurance policy, as applicable.