The policy should be scrutinised. There are certain policies which cannot be legally assigned. The policy which is operative at least for three years be accepted. A policy already assigned should not be accepted. Age of the insured should have been admitted. The borrower should be advised to produce a letter from the insurer indicating surrender value of the policy. Quantum of loan should not exceed 90% of the surrender value. An absolute assignment in favour of the bank should be obtained in a prescribed form.

Re Payment of Loan/Advance against LIC Policy should be paid within 36 To 60 months maximum.