Loan under Bima Nivesh Plans

Loan under Bima Nivesh Plans.

L I C has issued Policies under following plans in the Bima Nivesh series:

Bima Nivesh (Plan 132)
Bima Nivesh 2001 (Plan 141)
New Bima Nivesh (Plan 142)
Bima Nivesh Triple Cover (Plan 143)
Bima Nivesh 2002 (Plan 158)

The policy conditions states that no loan will be granted under these plans. The matter has been reviewed and it has been decided to grant loan under Bima Nivesh Plans on the following basis:

Loan may be granted after one year from the date of commencement of policy.
Loan can be granted to the extent of 80% of the surrender value of the policy.
The policy is to be suitably endorsed canceling the existing loan provision. We are enclosing a specimen of the endorsement to be placed on the policy. Further the policyholder should execute a letter of agreement; a specimen of the same is also enclosed.
The interest on loan is to be charged at the rate of 10.5% p.a. compounding half yearly.
Branch Offices should be vigilant in foreclosing such policies where two half-yearly installments of loan interest (excluding installment for the broken period) on the loan granted have not been paid. Foreclosure action must be initiated in such cases in the same way as it is done for loans granted on policies issued under other plans of the Corporation.

Needless to say loan will be allowed subject to the request received from the policyholder.


Endorsement

“Notwithstanding anything within mentioned to the contrary, it is hereby declared and agreed that loans are granted under this policy subject to the following terms and conditions and subject to production of satisfactory title:
Loan will be granted after one year from the date of commencement to the extent of 80% of the surrender value of the policy.
The policy shall be assigned absolutely to and held by the Corporation as security for repayment of advances and of the interest thereon.
Interest on the advance(s) shall be paid compounding half-yearly to the Corporation at the rate to be specified by the Corporation when the relative advance is made, the first payment of interest to be made on the next policy anniversary or on the date six months before the next policy anniversary whichever immediately follows the date on which the relative advance is made and every half-year thereafter. Interest is charged for a minimum period of six months.
The Corporation shall be entitled to call for repayment of the advance(s) with all due interest by giving 3 months notice. In the event of failure to repay the advance(s) when required or to pay the interest on the due dates as herein above mentioned or within 30 days after each due date respectively, the Policy shall be held, without the necessity of any notice being given, to be forfeited to the Corporation and the Corporation shall be entitled to apply the surrender value allowable in respect of the Policy in payment of the advance(s) and interest.
In case the policy shall mature or become a claim by death or is surrendered or another loan is taken, the Corporation shall become entitled to deduct the amount of the advance(s) or any portion thereof which is outstanding together with all interest from the policy moneys.



Form of letter of agreement (Loan under Bima Nivesh Plans)


Sr./Branch Manager Date: _______
Branch No. _____
Life Insurance Corporation of India
_________

Dear Sir,

Loan under Policy no ___________

With reference to my application dated __________ for a loan under the above policy which has been issued under _______ plan, I hereby agree that in the event of a claim arising under the above mentioned policy which may either be maturity claim or a death claim, the Corporation may adjust the installment of Sum Assured then payable towards repayment of the accrued interest and loan outstanding, if any. However if any balance of the aforesaid installment of sum assured is left over after the entire accrued interest and loan outstanding is liquidated by such adjustment, such balance should be payable to me or to my nominee Sri/Smt ________ after my death, as the case may be.
Yours faithfully,


( Signature )
( Name )