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LIC Housing to combine reverse mortgage with insurance plan LIC Housing Finance is looking to combine its reverse mortgage plan with a whole-life annuity provided by a life insurer. This will allow home owners to use their property to generate income for life as against for only 15 years as provided under the present reverse mortgage schemes. The housing finance arm of the Life Insurance Corporation on Thursday announced the launch of its reverse mortgage scheme. This product is available across the country for senior citizens above 60 years. The loan can be availed of either singly or jointly with a spouse, if the spouse is also above 60. The shortcoming of most reverse mortgage schemes is that it is available only for 15 years. With the increased life expectancy, most borrowers are expected to outlive the term of their reverse mortgage. Under present schemes while income from the reverse mortgage dries up after 15 years, the borrowers end up with the lender having a lien on their property. LIC Housing Finance chief executive SK Mitter told ET that the company was in talks with insurance companies to work out a scheme where home equity could be used to buy an annuity that provides income for the entire life span of the borrower. “We are working out how to merge an annuity plan with this product” said Mr Mitter. The reverse mortgage loan by LICHF will be offered at a fixed interest rate, subject to reset every five years. Under the scheme, senior citizens can avail of the loan either on a monthly payment or on a lump sum payment or a combination of both. The property evaluated for the loan should have at least 20 years of residual life. The maximum loan balance shall be 90% of the value of the property and the loan balance will include interest till maturity. The amount of the loan will take into consideration the property value, age of the borrower, and the rate of interest. The loan will become due and payable only when the last surviving borrower dies or opts to sell the home, or permanently moves out of the home.