LIC of India plans to enter in the Reverse Mortgage Sector

By Pallavii Pitale

LIC of India, the largest insurer in the country, plans to enter in the Reverse Mortgage Sector after exploring opportunities with various banks.

Reverse mortgage plans are more beneficial to the senior citizens which enables them to mortgage their real assets with a lender and convert part of the equity into tax free regular income. This helps them save their life-time assets from selling.

In spite of that, the existing tie-ups of other insurance companies with various banks for the reverse mortgage schemes has not fetched much success in India till now . Also not many Insurance agencies along with the banks are offering these services.

As of now, Star Union Daiichi Life Insurance along with Central Bank of India is offering one such scheme.
The LIC officials hope that LIC’s entry in the field along with the modified Reverse Mortgage loan enabled annuity scheme of ( NHB) that would provide life long annuity to the buyer and his / her spouse, would surely catch up.

LIC Housing Finance, the Real Estate Finance Wing of LIC is already offering Reverse Mortgage Loan Schemes. The officials are keen on exploring the linkages between the two. The housing finance regulator is in writing terms with Finance Ministry for providing tax exemptions for the borrowers. As in the existing scenario, the insurance houses ( the borrowers ) have to pay the interest, treated as accrued interest on which the bank has to pay tax.