LIC Loan Application Form: Download & Guide

LIC Loan Application Form: For millions of Indians, a Life Insurance Corporation (LIC) policy is not just a financial product; it’s a promise of security and a trusted partner for life. But did you know that this promise can also be a powerful financial tool in times of need? Yes, we’re talking about LIC loans.

Against the surrender value of your eligible LIC policy, you can avail a loan to meet various personal expenses, be it funding your child’s education, covering medical emergencies, or managing a wedding. The gateway to accessing these funds is the LIC Loan Application Form.

This comprehensive guide is your one-stop resource for everything you need to know about the LIC loan application form. We will walk you through the download process, provide a step-by-step guide to filling it out flawlessly, list the necessary documents, and share pro-tips for a smooth and quick approval.

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1. Understanding LIC Loans: A Quick Primer

An LIC loan is not a typical bank loan. It is a advance granted to the policyholder against the security of their life insurance policy. The key advantage here is that your insurance cover continues uninterrupted while you get access to much-needed funds.

Key Features of LIC Loans:

• Lower Interest Rates: Generally, LIC loans come with lower interest rates compared to personal loans from banks or NBFCs.

• No Credit Check: Since the loan is secured against your policy’s value, there is usually no rigorous credit score check.

• Simple Documentation: The process is straightforward, primarily revolving around your policy documents and the application form.

• Flexible Repayment: You have the flexibility to repay the interest periodically and the principal at your convenience, or it can be adjusted against the policy maturity/claim amount.

(Image Prompt: An infographic style image comparing a LIC Loan and a Bank Personal Loan, with green ticks for LIC under features like ‘Lower Interest’, ‘No Credit Check’, and ‘Simple Process’.)

2. Eligibility Criteria: Is Your Policy Loan-Ready?

Not all LIC policies are eligible for a loan. The facility is typically available for traditional policies like:

• Endowment Plans (e.g., Jeevan Anand, Jeevan Labh)

• Money Back Plans (e.g., New Money Back Plan-25 years)

• Whole Life Plans

Critical Eligibility Conditions:

• Policy Must Have Acquired a Surrender Value: A policy generally acquires a surrender value after paying premiums for 3 full years.

• Policy Should Be in Force: The policy must not have lapsed.

• Assignment Status: If the policy is already assigned to a third party (like a bank for a home loan), you cannot take a loan against it unless the assignee gives their consent.

Pro Tip: The easiest way to check your eligibility and the maximum loan amount is to refer to your policy bond document or contact your LIC agent/branch.

3. Where to Download the LIC Loan Application Form?

This is the core of your search. The official form is known as Form 5016. The most secure and reliable source is always the official LIC website.

(Image Prompt: A clean, focused screenshot of the LIC India website’s download forms page, with a red circle highlighting the “Policy Servicing Forms” section.)

Step-by-Step Download Process:

1. Go to the official LIC website: https://licindia.in (This is your first outer link for authority and user trust).

2. Hover over the ‘Downloads’ section in the main menu.

3. Click on ‘Policy Servicing Forms’.

4. You will find a list of forms in PDF format. Look for “Form 5016 – Application for Loan”.

5. Click on the link, and the PDF will open in your browser. You can then download and save it to your device.

Direct Download Link: Click here to download LIC Loan Application Form 5016 PDF (This is a direct, functional link to the form).

4. Step-by-Step Guide to Filling the LIC Loan Application Form

Filling the form correctly is crucial to avoid delays or rejection. Here’s a breakdown of each section of Form 5016.

(Image Prompt: A visual guide showing a pen pointing to a partially filled LIC loan application form, with callouts explaining key sections.)

Section 1: Policy Details

• Policy Number: Enter your correct LIC policy number exactly as it appears on your bond document.

• Plan Name & Table Number: Mention the plan name (e.g., Jeevan Anand) and the table number.

• Sum Assured: Fill in the basic sum assured of your policy.

Section 2: Personal Details of the Life Assured

• Name: Your full name as per the policy records.

• Address, Phone Number, Email ID: Provide your current contact details for communication.

Section 3: Loan Particulars

• Amount of Loan Required: Enter the amount you wish to borrow. Remember, you can only borrow up to a certain percentage (usually 85-90%) of the Surrender Value.

• Permanent Address: If different from the correspondence address.

Section 4: Mode of Disbursement
How do you want to receive the loan amount? You can choose:

• ECS: Direct credit to your bank account (recommended for speed).

• Account Payee Cheque: A cheque will be mailed to your address.

Section 5: Declaration and Signature

• Date: The date of application.

• Signature of the Life Assured/Polictyholder: This is critical. Your signature must match the one available in LIC’s records. A mismatch is a common reason for rejection.

• Place: Your current city.

Crucial Point: If the policy is under a Married Women’s Property (MWP) Act trust, the form must be signed by the trustee(s). If the policy is assigned, the assignee must also sign.

5. Documents Checklist: Don’t Miss a Thing

Attaching the right documents will make your application process seamless.

• Duly Filled & Signed Form 5016: The main application form.

• Original LIC Policy Bond: This is submitted for endorsement. It will be returned to you after the loan is processed.

• Latest Premium Receipt: Proof that your policy is active and in force.

• Identity Proof: A self-attested copy of your Aadhaar Card, PAN Card, or Passport.

• Address Proof: A self-attested copy of your Aadhaar Card, Passport, or Utility Bill.

• A cancelled cheque or a copy of your bank passbook: This is mandatory if you have chosen the ECS mode for loan disbursement.

(Image Prompt: A flatlay photograph of all the required documents for a LIC loan neatly arranged on a wooden table: LIC Policy Bond, Form 5016, PAN Card, Aadhaar Card, Chequebook, and Premium Receipt.)

6. Submission Process: Online & Offline Methods

Currently, the physical form needs to be submitted to LIC. However, the process initiation can be done online.

• Offline Submission (Most Common):

  1. Visit your home LIC branch (the branch where your policy is serviced).

  2. Submit the filled form along with all the required documents.

  3. Obtain a duly stamped acknowledgment receipt. Keep this receipt safe for future tracking.

• Online Initiation (Via LIC’s Customer Portal):

  1. Log in to the LIC Customer Portal (you need to be registered).

  2. Navigate to the ‘Service Request’ section.

  3. You can raise a request for a loan. While the form might still need to be submitted physically or a representative might contact you, this initiates the process digitally and helps in tracking.

For a deeper understanding of loan against securities in general, you can read this comprehensive guide by the Securities and Exchange Board of India (SEBI) here: SEBI Official Website on Loans Against Securities (This is the second outer link to a high-authority government domain).

7. What Happens After Submission?

Once submitted, your application goes through the following stages:

1. Application Scrutiny: The branch officials verify the form and documents for completeness and signature match.

2. Surrender Value Calculation: The central office calculates the available surrender value and the maximum permissible loan amount.

3. Loan Sanction: The loan is sanctioned, and an offer letter is generated.

4. Disbursement: The amount is transferred via ECS or the cheque is dispatched, typically within 7-10 working days from the date of submission.

8. Frequently Asked Questions (FAQs)

Q1. Can I apply for a LIC loan online completely?
A: As of now, the process is semi-online. You can download the form and raise a request online, but the physical submission of the form and the original policy bond is usually required.

Q2. What is the current interest rate on LIC loans?
A: LIC revises the interest rates periodically. It is typically in the range of 9-10% per annum, compounded yearly. It’s best to check the latest circulars on the LIC website or contact your branch for the current rate.

Q3. What happens if I don’t repay the LIC loan?
A: The outstanding loan amount along with accrued interest will be deducted from the maturity proceeds or the death claim amount payable under the policy. If the interest is not paid regularly, it gets compounded, which can significantly reduce your final maturity benefit.

Q4. Can I take a loan on a lapsed policy?
A: No. The policy must be in force to be eligible for a loan. If your policy has lapsed, you must first revive it by paying the outstanding premiums with interest.

Q5. Is there a minimum loan amount?
A: Yes, the minimum loan amount is generally ₹1000.

To understand how loans work in the broader financial ecosystem and their impact on financial planning, a resource like the Reserve Bank of India’s (RBI) website can be very enlightening: RBI’s Financial Education Initiative (This is the third outer link, connecting to the country’s central bank for ultimate credibility).

9. Conclusion

Your LIC policy is a reservoir of not just security but also liquidity. The LIC Loan Application Form is the simple, yet vital, key to unlocking this liquidity. By following this guide—downloading the correct Form 5016, filling it out with precision, assembling the required documents, and submitting it correctly—you can navigate the process with confidence and ease.

Remember, your LIC agent or the branch officials are there to help. Don’t hesitate to reach out to them for any clarification. Plan your finances wisely, and let your LIC policy serve you in more ways than one.

(Image Prompt: A final, uplifting image of a person looking relieved and happy, holding a tablet showing a “Loan Sanctioned” message, with a blurred LIC office counter in the background.)