If you have availed loan against LIC policy bank can recover loan amount from lic policy

Your LIC policy must have been assigned as security for loan repayment

1. You have not informed the outstanding amount and the period of default.

2. You have already assigned your LIC policy in favour of the lending Bank authorising the Bank to appropriate the said policy in case of your being defaulter in repaying the loan and in case the loan account becomes NPA.

3. You shall have to negotiate with the Bank for one time settlement on the humanitarian ground since the bank is legally entitled to appropriate your said LIC policy assigned by you with the Bank..

1. Your case is very sensitive.

2. Your remedy lies in approaching the High Court praying for a direction upon the Bank not to appropriate the LIC policy and allowing you to avail the benefits offered by the LIC for treatment of your said ailments.

3. High Court has enormous power to pass appropriate order granting relief to you.

4. The interest of your successors will not come before the right of the lending Bank dealing with public money to recover the outstanding amount.

1, The loan taken by you and default in making repayment of it has nothing to do against insurance policy.

2. however if it is found that you had hypotheticated your LIC policy while taking the personal loan, then the creditor on default of repayment can utilise the LIC policy to off set the default amount from the insurance amount you are likely to get.

3. So as long as this does not happen you will get your insurance benefit and but if at the end if you failt o pay oof your debt the creditor can usurp the money lying with the LIC to recover its loan amount.

The loan from a bank is basically overdraft facility against the pledging of an insurance policy

In the event of non repayment of loan bank can appropriate insurance policy

3) you can take legal proceedings restraining bank from appropriating your insurance policy for non re payment of loan but your chances of obtaining relief are bleak

Hi,

It seems that you have not disclosed the complete case. You have not mentioned as to what is the amount of bank loan and what is the defaulted amount. Also, there is no disclosure as to what is the amount of coverage in LIC. Without such details, it is difficult to advise correctly. However, it is suggested that you may file injunction suit in against bank.

1. when you took loan from the bank, what collateral security did you provide to the bank to secure the repayment of loan?

2. on default the bank can first touch the secured asset and only if its not sufficient to cover the loan outstanding can the bank touch the other assets of the borrower

Sir your rating matters least to me

Your answer lies in your query itself

Article 21 of Constitution - Right to life and personal liberty which includes right to live with dignity which in turn includes the right to prevent a wasting of life - which the bank is seeking to do by claiming on the LIC money thereby rendering you to die a wasteful life without proper treatment in absence of resources to cover the treatment cost

if there is a collateral given to bank to secure repayment of loan, then bank cannot touch other assets of borrower. However in no case can the bank touch upon the moneys received under LIC policies to cover critical illnesses because it is in direct conflict with Article 21

You have perhaps misconstrued my response

Bank has no authority to foreclose the LIC policy in your name until the police has not been assigned to LIC for the purpose of loan.

You have not mentioned that if the LIC policy has been assigned to bank as collateral for the purpose of availing loan.

If it is not then the bank cannot forcibly take away your policy, even the LIC cannot settle the money to money without your authorization.

You have still not come out with the details.

The policy what you have taken may be covering the critical illness clause.

How do you say that the bank will avail the policy money without you assigning the policy to them?

Without an endorsement for assigning the policy to the bank, the LIC cannot settle the policy claim amount to the bank and they cannot give valid discharge for this.

Do you have the original policy with you or whether it is with the bank after assigning the same to them?

You clarify this details so that you will get proper information and opinion in this regard.

You think you know the law better than the bank or anyone.

If the policy was assigned to the bank it is total and the assignment cannot be partial.

The critical illness riders are not exempted from being assigned to bank.

The policy as a whole is to be assigned unless the assignment is not valid.

The bank will claim the amount payable on the policy in full and they cannot be prevented from claiming them in full.

You cannot avail all the benefits i.e., the loan from bank and the LIC policy benefits too without obliging the bank for the repayment of loan availed from them.

Please don't worry what has been mortgaged can only be attachable in case of default.