🏦 Borrow without breaking the plan
Loan against your State Life policy
The rules in plain language — when you qualify, how much you can borrow, what it costs, and why it beats surrendering — with an estimator and links to the official forms.
State Life's rules
Four things to know before you borrow
1
Eligible after two years
The policy must have been in force for at least two consecutive years with no premium in default — that is when it first acquires a surrender value to borrow against. Several plan pages put the first loan after the third premium.
2
Up to 80% of surrender value
The ceiling is 80% of the net surrender value on the day you apply — not of the sum assured. Surrender value starts small and climbs with each premium and attached bonus, so patience buys more room.
3
Markup, compounded half-yearly
State Life's site quotes 10% per annum (FAQ) and 12.5% per annum (Manage Your Policy), compounded semi-annually. Confirm the live rate at your zonal office; both are shown in the estimator.
4
Repay any time — or it comes off the end
Part or full repayment is allowed at any point. Anything outstanding, plus markup, is deducted from the maturity value or death claim, so the cost lands on the final payout if you never repay.
Sources: State Life FAQs, Manage Your Policy and Glossary — read 2026-09-16.
Loan calculator
How much room, and what it costs
Enter the surrender value from your latest policy statement (or ask your zonal office for it) — the estimator applies State Life's 80% ceiling and shows what the markup adds over time at both rates State Life publishes.
Your zonal office quotes this; it is not the sum assured.
Your loan room
Rs 400,000
80% of Rs 500,000 net surrender value
Borrowing Rs 400,000, unpaid for 3 years:
- At 10% p.a., half-yearly compounding
- Rs 536,038+ Rs 136,038 markup
- At 12.5% p.a., half-yearly compounding
- Rs 575,484+ Rs 175,484 markup
Whatever is outstanding is deducted from the maturity value or death claim. Repaying earlier — even in part — cuts the markup. Rates per State Life's site; confirm the live rate when you apply.
The honest comparison
Loan vs surrender vs paid-up
🏦 Policy loan
- ✓ Cover and bonuses continue untouched
- ✓ Repay whenever you can, part or full
- ✓ No credit check — it is your own money
- ✗ Markup accrues; unpaid balance reduces the payout
🚪 Surrender
- ✓ Cash in hand, nothing to repay
- ✗ The policy, the cover and future bonuses end for good
- ✗ Early surrender values are far below premiums paid
- ✗ State Life itself advises against it
⏸️ Paid-up
- ✓ Stop paying; a reduced sum assured stays in force
- ✗ No further bonuses attach once paid-up
- ✗ Reduced benefit at maturity or on death
- • A fallback when premiums truly cannot continue
Our usual advice: if the need is temporary, borrow; if premiums have become permanently unaffordable, ask about paid-up before surrender; and never surrender in the first few years without seeing the number first — we will get it for you.
How to apply
Three steps at the zonal office
01
Get your surrender value
Ask your servicing zonal office (or check your latest statement) for the current net surrender value — 80% of it is your ceiling.
02
Fill the loan form
Download the prescribed form from State Life's Manage Your Policy page, complete and sign it.
03
Submit with the policy document
Hand in the form with your original policy at the zonal office; the loan is paid out once processed. Keep the receipt.
Policy loans
The questions people ask
Can I take a loan against my State Life policy?
Yes, once the policy has acquired a surrender value — State Life states this happens after it has been in force for at least two consecutive years with no premium in default. From then you can borrow up to 80% of the net surrender value without cancelling the cover.
How much loan can I get on my State Life policy?
Up to 80% of the policy's net surrender value at the time of the loan. The surrender value is small in the early years and grows with every premium paid and every bonus attached, so the loan limit rises over the life of the policy. Your zonal office quotes the exact figure; the estimator on this page shows how the arithmetic works.
What is the interest rate on a State Life policy loan?
State Life quotes the markup two ways on its own site: 10% per annum on its FAQ page and 12.5% per annum on its Manage Your Policy page — both compounded half-yearly. Ask your zonal office to confirm the rate applied on the day you apply; we show both in the estimator so you can see the range.
How do I apply, and how long does it take?
Fill in the prescribed loan form (downloadable from State Life's Manage Your Policy page), sign it, and submit it with your original policy document at your servicing zonal office. Processing time is set by the office; we can tell you what to expect in your zone.
Do I have to repay a policy loan?
You can repay in part or in full at any time during the term. If you don't, State Life recovers the loan plus accrued markup from the final payment — the maturity value or the death claim — so an unpaid loan quietly reduces what your family or you receive at the end.
Is a policy loan better than surrendering?
Almost always. Surrender ends the policy, the cover and the bonus stream for good — State Life itself discourages it. A loan keeps everything running and can be cleared later. Surrender only makes sense if you have decided you no longer want the policy at all.
Does the loan affect my bonuses?
No. Bonuses keep attaching to the full sum assured while the policy is in force. What changes is the net amount paid out at the end if the loan and its markup are still outstanding.
Free consultation
Not sure whether to borrow, pause or surrender?
Tell us the situation and the plan — we get the surrender value and the live markup from the zonal office and lay out the three options with real numbers, free.
Prefer to just ask?
Send your policy number and what you need — an advisor replies with your options.
Sidq Advisorsis an independent advisory practice, not State Life's official website. Loan terms, rates and surrender values are set by State Life and confirmed by your servicing zonal office; the estimator is arithmetic on figures you enter, not a quote.