ICICI Prudential Life Insurance disbursed more than ₹900 crore in loans against traditional policies to more than 42,700 customers to tide them over unexpected financial obligations in FY25, the company has stated.

The loan against policy is a useful feature as it allows customers to unlock liquidity, in what is essentially a long-term plan, and ensures the life cover and savings objective are not disrupted. More than 98% of loans were disbursed within 24 hours and were paperless, said Amish Banker, Chief Operations Officer, ICICI Prudential Life Insurance. 

“Life insurance is a long-term product, and remaining committed for the tenure is the key to achieving the financial goal. We also understand that customers may face liquidity challenges and therefore, urge our customers to avail the loan feature. This will enable them to meet short-term liquidity needs and also ensure that the long-term savings plan is uninterrupted. Customers can avail of loans up to 80% of the policy’s surrender value,” Banker said.

More than half, or 52%, of the customers availed the loan facility through the company website and mobile app. "We have seen an increasing adoption of the loan against policy feature among our customers, with a 60% year-on-year increase in loan disbursals in FY2025," said Banker.

Notably, availing a loan against a policy has no impact on customers’ credit scores. Interestingly, the funds can also be utilised for premium payments, ensuring continuity of the policy and its benefits, as mentioned in the press release.

Loans against insurance policies generally come with lower interest rates compared to personal loans as they are secured loans, meaning the policy's surrender value acts as collateral, reducing the risk for the lender