1. The policy itself must have cash value. Personal insurance contracts are divided into two categories: one is medical expense insurance and accidental injury insurance contracts, which belong to loss compensation contracts and have no cash value and cannot be used as collateral; The other is endowment insurance, investment dividend insurance and annuity insurance with savings function. After the insured pays the premium for more than one year, the policy has a certain cash value, which can be used as a pledge.
2. The term and loan amount are limited. At present, China's policy pledge loan has a short term, generally not exceeding 6 months, and the maximum loan balance does not exceed a certain proportion of the cash value of the policy, generally fluctuating between 70% and 80%. After the loan expires, it must be returned in time. Once the loan principal and interest exceed the cash value of the policy, the policy will be permanently invalid.
3. Policy loans charge interest. At present, the interest rate of policy loans in China is relatively fixed. In general, the calculated interest rate is higher than the interest rate for calculating the cash value of the policy.
legal ground
Article 5 of People's Republic of China (PRC) Property Insurance Contract Regulations * * * The insured puts forward an insurance request, fills in an insurance application form, and agrees with the insurer on the way to pay the insurance premium, which shall be underwritten by the insurer's signature. The insurer shall issue an insurance policy or insurance certificate to the insured in time according to the insurance contract.