What are the interest rates and repayment terms for a loan against an insurance policy?

Loans against insurance policies are secured loans where the policy serves as collateral. Depending on the policy type and insurer, these loans typically have lower interest rates and flexible repayment terms.

• Interest rates: The interest rates applicable on loans taken against insurance policies can vary significantly based on the type of insurance product, the insurance provider, the loan amount, and the individual policyholder’s profile and risk assessment by the loan provider.
• Repayment terms: The repayment terms for loans against insurance policies are structured considering the term and longevity of the underlying insurance product. For term insurance plans, loans typically need to be repaid before the end of the policy coverage term.
• Repayment structure: Applicants can expect options of interest-only payments initially, equal instalments covering principal and interest, or single balloon payment of the outstanding principal and interest at loan maturity. The financial institutions may require a minimum threshold for partial repayments during the tenure of the loan.