Loan taken on life insurance policy, now cannot be repaid by credit card

Loan Again Life Insurance: The Insurance Regulatory Development Authority of India (IRDAI) has decided to discontinue the facility to repay loans taken on life insurance through credit cards. This means that if you have taken a loan against a life insurance policy, then you will not be able to repay your loan with the help of a credit card.

IRDAI has told all life insurance loan holders that this method of loan repayment on credit cards is being discontinued. In such a situation, close it with immediate effect, because now it will not be accepted. In August 2022, the Pension Fund Regulatory and Development Authority (PFRDA) announced that the National Pension System would stop accepting credit card payments for subscription and contribution to Tier 2 accounts.

What is loan against life insurance

Loan against life insurance policy can be a good option as compared to other loans, as it does not require any additional assets. You can take a loan by pledging your policy. It is a good option as compared to personal loan and credit loan. Its interest may vary on different policies.

How much amount is received

Loan amount can be availed against life insurance policy up to 80% of your policy surrender value. At the same time, according to the SBI website, a loan of 85 percent of the surrender value can be taken. There is no limit on the maximum. You can also be charged a processing fee on such loans.

To whom this loan is given

If you have bought the policy, then you can take a loan against this policy. You must be at least 18 years old to avail the loan. This loan can be issued only in the name of the users who have bought the policy. No one else can take advantage of this policy.

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