PLI Loan Against Policy & Surrender Guide (FY 2025-26)
PLI Loan — Key Rules
| Feature | Endowment (Santosh/Suvidha) | Whole Life (Suraksha) |
|---|---|---|
| Min tenure for loan | 3 completed years | 4 completed years |
| Loan amount | Up to 90% of surrender value | Up to 90% of surrender value |
| Interest rate | ~10% p.a. | ~10% p.a. |
| Effect on bonus | Bonuses continue accruing | Bonuses continue accruing |
| Unpaid loan | Deducted at maturity/death | Deducted at maturity/death |
Surrender Value Guide
| Policy | Min years to surrender | Value received | Advisable? |
|---|---|---|---|
| Endowment (Santosh) | 3 years | Paid-up SA + vested bonus (reduced) | Avoid if possible |
| Whole Life (Suraksha) | 4 years | Paid-up SA + vested bonus (reduced) | Avoid if possible |
Frequently Asked Questions
How to take a loan against PLI policy?
Apply at your PLI-servicing post office with the original policy document and application form. Loan sanctioned within 2–3 weeks. Eligible after 3 years (EA) or 4 years (WL) of premiums. Amount: up to 90% of surrender value. Interest: ~10% p.a. Bonuses continue accruing during the loan period.
What is the surrender value of PLI Santosh after 5 years?
After 5 years on a ₹10L SA Santosh, surrender value is approximately ₹3.5–4.5L (paid-up SA × 5/term years + vested bonuses). Exact amount depends on entry age and premiums paid. Early surrender significantly reduces returns versus holding to maturity.
Can I revive a lapsed PLI policy?
Yes — a lapsed PLI policy can be revived within 5 years of the first unpaid premium by paying all arrears + interest (compound) + revival fee. After 5 years, revival may not be possible and the policy becomes paid-up (reduced SA, no new bonuses). Contact your post office with the policy document for revival procedure.
What happens to PLI if I leave government service?
Your PLI policy does not lapse if you leave government service. Options: (1) continue paying premiums privately (policy remains in force), (2) surrender for paid-up value, or (3) convert to paid-up policy (no more premiums, reduced SA at maturity). The policy benefits are not linked to continued employment.
Is PLI loan amount taxable?
No — a loan against an insurance policy is a debt, not income, and is not taxable. If the loan is repaid, no tax impact. If unpaid, it is deducted from maturity/death benefit — the remaining amount is still tax-free under 10(10D).
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