Policy loan refers to a loan method in which the insured mortgages the policy he holds to the insurance company and obtains funds according to a certain proportion of the cash value of the policy.

1. What are the precautions for policy loans?

1. The premise of the policy loan is that it has been insured for more than two years and the insurance account has cash value. Usually, the maximum loan amount provided by insurance companies is 70%-80% of the cash value of customers' policies.

2. Not all insurance policies can be loaned. Enterprises and individuals who have purchased insurance policies with savings nature such as life insurance, dividend insurance, endowment insurance and annuity insurance can make corresponding loans by way of policy pledge according to the cash value of the purchased insurance.

3. Policy pledge loans are only suitable for short-term capital turnover, not for high-risk investments such as stocks.

4. Policy loans must be applied by the applicant or the insured, and may not be entrusted; It is common in children's insurance that a policy that has been exempted from premium cannot apply for a pledge loan.

Second, the repayment method of the policy loan?

Policy loan repayment method: customers can choose to repay in full or in part at one time.

If the customer fails to repay the loan and loan interest when the loan expires, the owed policy loan and accumulated loan interest constitute a new policy loan, and the interest is calculated according to the policy loan interest rate on the next day of the maturity date.

If the customer partially repays the loan, the repayment will be used to repay the accumulated interest first, and then to repay the loan principal. If the borrower fails to perform the debt at maturity, the insurance contract will be terminated when the loan principal and interest are lower than a certain proportion of the cash value of the policy.