Tata AIA Life Insurance (Tata AIA) has introduced an innovative instant loan service for its policyholders, providing access to emergency funds swiftly and efficiently. Policyholders can now borrow up to Rs 1 lakh against their insurance policies without losing coverage. The loan amount is credited to the consumer’s account within just one minute through the insurer’s advanced MyDigiAccount portal.
This new service aims to offer immediate financial relief with minimal paperwork and competitive interest rates. Since its launch, the digital-first initiative has processed over 500 requests and disbursed approximately Rs 5.5 crore, enhancing liquidity solutions for policyholders.
Eligible policyholders can avail loans against the surrender value of select life insurance policies. The loan, capped at Rs 1 lakh, requires no collateral or credit check and comes with a favorable interest rate of 8.80% per annum, significantly lower than typical personal loan rates. The streamlined process ensures that funds are available within a minute of application, eliminating the delays associated with traditional loan approvals.
The annual report of the Insurance Regulatory and Development Authority of India (IRDAI) for FY23 revealed a 26.52% increase in benefits paid for surrenders/withdrawals, amounting to Rs 1.98 lakh crore. This indicates a rise in life insurance policies surrendered before maturity, often due to financial emergencies or resource shortfalls.
To address such scenarios, Tata AIA offers loans against the surrender value of traditional policies. Surrender Value refers to the amount policyholders receive when terminating a policy before its maturity date. The Loan Against Policy service bypasses lengthy loan procurement processes and offers lower interest rates compared to personal loans. Customers can repay the loan at their convenience, with any outstanding amount adjusted during the claim settlement. Unlike banks and NBFCs, Tata AIA does not conduct credit score checks or demand collateral from their policyholders.
