Can I use my life insurance policies as collateral when taking a personal loan from a bank?
Yes, you can use your life insurance policies as a collateral security for the loan liability. Banks usually insist on having a collateral security in addition to the primary security provided by the loan applicant. These can be in the form of certain financial assets such as National Savings Certificates (NSCs) or life insurance policies. Generally, this is done through the assignment of the policy.
Assignment of a policy means that the title, rights and benefits under the policy get legally transferred to another person or entity.
In this case, you can assign the policy in the name of the bank which is giving you the loan, thereby pledging the policy with the loan provider as collateral security.
Yes, you can use your life insurance policies as a collateral security for the loan liability. Banks usually insist on having a collateral security in addition to the primary security provided by the loan applicant. These can be in the form of certain financial assets such as National Savings Certificates (NSCs) or life insurance policies. Generally, this is done through the assignment of the policy.
Assignment of a policy means that the title, rights and benefits under the policy get legally transferred to another person or entity.
In this case, you can assign the policy in the name of the bank which is giving you the loan, thereby pledging the policy with the loan provider as collateral security.
