You've been paying premiums for years. Here's which of those policies can also work as collateral when you need cash.
In India, you can borrow against life insurance plans that build cash value: endowment, money-back, whole life, and ULIPs. Pure term plans can't be used. Many lenders make you wait for a ULIP's lock-in to end, but SLiQ's lending partners offer loans against ULIPs even during the lock-in period. Loans on SLiQ start at 9.99% p.a., with funds disbursed within 6 hours.
SLiQ is a fully digital lending platform, backed by Zerodha's Rainmatter, where you can pledge insurance policies, mutual funds, or shares for an instant loan. No paperwork, and checking your eligibility doesn't touch your credit score.
1What Life Insurance Options Qualify for a Loan?
Five plan types are commonly accepted, because each builds cash value over time:
- Endowment plans. The most widely accepted option, with steady, guaranteed cash value.
- Money-back policies. Periodic payouts don't stop you from borrowing against the remaining surrender value.
- Whole life plans. Long tenures mean larger surrender values, so these often support bigger loans.
- ULIPs. Many lenders ask you to wait until the lock-in ends. On SLiQ, you can borrow against your ULIP even under lock-in.
- Traditional savings plans. These qualify once premiums have been paid for the minimum period, usually two to three years.
Term insurance and health insurance have no cash value, so no lender can accept them.
2Can You Get a Loan Against a ULIP During Lock-in?
Yes, on SLiQ. SLiQ's lending partners structure the loan as a lien on your policy instead of a surrender, so your ULIP stays in force and the lock-in isn't broken. Your premiums need to be current and the policy active.
Loans are based on your current fund value, typically 50 to 70% of it. For example, a ULIP with a fund value of ₹15 lakh can be eligible for a loan of ₹7.5 lakh to ₹10.5 lakh, at rates that usually range from 10.5% to 11.5% p.a. Insurers supported include HDFC Life, ICICI Prudential, Tata AIA, SBI Life, and Bajaj Life.
Read the full breakdown in SLiQ's guide to loans against ULIPs under lock-in.
3Where Can You Borrow Against Your Life Insurance?
You have three routes, and they differ more than most borrowers expect:
| Route | What to Expect | Best For |
|---|---|---|
| The insurer itself (e.g. LIC) | Up to 90% of surrender value, interest set and revised by the insurer, usually around 9 to 10% p.a. | Borrowers who want a simple, single-policy loan |
| Banks and NBFCs | Terms vary widely, and many accept only ULIP and endowment plans after lock-in | Borrowers with specific lender relationships |
| SLiQ | From 9.99% p.a., funds within 6 hours, ULIPs accepted even under lock-in, no prepayment or foreclosure charges | Borrowers who want speed, comparison, and zero paperwork |
4How Does SLiQ Help Borrowers Compare Their Options?
SLiQ connects you to seven RBI-regulated lenders: Tata Capital, Bajaj Finance, Jio Financial Services, ICICI Bank, Aditya Birla Capital, Geojit, and Infina. Instead of approaching each lender separately, you see your eligible amount in one place, choose your policy and lender, and complete a paperless KYC in about two minutes.
SLiQ has facilitated over ₹400 crore in funds for 7,000+ customers.
5What Should You Check Before Pledging a Policy?
Three things decide whether this loan helps or hurts you:
- The right value. Traditional plans are valued on surrender value, and ULIPs on current fund value. Neither is your sum assured, so younger policies support smaller loans.
- Premium status. A lapsed policy can't be pledged, and missed premiums during the loan can reduce its value.
- Market risk on ULIPs. If your fund value falls below the outstanding loan, lenders may ask you to repay or surrender the policy, and your life cover could lapse.
A ULIP loan is tied to a market-linked fund value, not a fixed guaranteed amount. Monitor it, especially during volatile markets, so a margin shortfall doesn't catch you off guard.
If you hold an endowment, money-back, whole life, or ULIP policy, you likely already own a borrowing option, and with SLiQ even a ULIP under lock-in counts. The smartest move is to compare routes before you commit. SLiQ lets you check your policy's eligibility in minutes, so you can access funds while your life cover stays in place.
6Frequently Asked Questions
Endowment, money-back, whole life, traditional savings plans, and ULIPs. Term and health plans don't qualify.
Yes, through SLiQ. Its lending partners offer loans against ULIPs even under lock-in, structured as a lien instead of a surrender, as long as premiums are current and the policy is active.
No. Term plans have no cash value, so there is nothing for a lender to accept as collateral.
For ULIPs on SLiQ, typically 50 to 70% of the current fund value, at 10.5% to 11.5% p.a. Insurers like LIC lend up to about 90% of surrender value on traditional plans.
Yes, as long as premiums stay current and the outstanding loan doesn't exceed the policy's value. For ULIPs, a sharp fall in fund value can trigger a repayment request.
On SLiQ, funds are disbursed within 6 hours of completing your application, with zero prepayment or foreclosure charges.
No. Checking your SLiQ qualification has no impact on your credit score.
Not sure which of your policies qualifies?
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las.sliqfin.com | +91-9136542858 | lasinfo@sliqfin.com
Disclaimer: Interest rates, loan-to-value ratios, and eligibility criteria are indicative and may vary by insurer, policy type, and lending partner. This article is for informational purposes only and does not constitute financial or insurance advice. Please read all policy documents carefully and consult a qualified advisor before pledging. Backed by Rainmatter (Zerodha).
