LIC Raises Interest Rates on Loans Against Policies

Life Insurance Corporation (LIC) has increased interest rates on loans against insurance policies. It also increased interest rates on delayed payments of loan by the policyholder. Now, LIC charges 9% on loans against policies. Earlier LIC used to charge 8% interest rate for delayed payments. It is also now hiked interest charges of delayed payments to 10%.

Recently, the corporation has observed that policyholders are borrowing loans from LIC and parking funds in fixed deposits of companies such as HDFC, which is a triple A rate company offering rate of returns at 9.5% on 15 month deposits. To avoid this, LIC has increased interest rates to 10%. It is observed that some private insurers are charging higher interest rates of 12.5%.