Policy cash value loans, with a cycle of 6 months, can not only repay interest but also principal, and apply for loans, whether it is policy loans, consumer loans, mortgage loans or other types of loans. As long as the loan contract is signed, the borrower needs to repay the loan principal and interest on schedule. If the borrower breaches the contract, the lender can sue the borrower according to the loan contract and safeguard its rights and interests through legal means.

Advantages of policy loans:

First, when the policy is valid, the customer can continue to enjoy the insurance protection stipulated in the policy during the loan period. Compared with surrender, the insured need not worry about losing protection due to surrender, and can also avoid the loss of surrender fees.

Second, the policy loan processing method is simple. The insured only needs to bring the policy, valid identity certificate and written consent of the insured to apply for a loan to the insurance company in person. Taiping Life said that as long as the lender brings all the materials, the insurance company can complete the business on the same day. Usually, the loan will be remitted to the bank account designated by the lender, and the loan arrival time is generally 1-3 days.

Third, the insurance company's policy loan interest rate is relatively low. The interest rate of commercial loans from banks for six months or less is 6.2 1%, and from six months to 1 year (inclusive) is 7.02%.

Disadvantages of policy loans:

First, interest rates are different. The interest rate of policy pledge loans through banks is the commercial loan interest rate announced by the central bank, which is usually higher than the policy loan interest rate of insurance companies.

Second, the procedure and time are different. Compared with insurance companies, banks also need insurance companies to produce relevant information, such as proof of cash value of policies and proof of policy freezing. These materials must be prepared by the lender.

Because the insurance company needs to confirm and verify, there is no real-time communication channel between banks and insurance companies, so the processing time will be longer than going directly to the insurance company.

Third, the loan amount is different from the reference standard. Some banks can provide loans up to 90% of the cash value of the policy at that time; Moreover, some banks will also refer to the lender's credit, the number of deposits and other indicators, and the loan amount may exceed the cash value of the policy.

Fourth, almost all life insurance companies can provide loans to eligible policies, but the types of policies recognized by banks are limited, and there are fewer banks and outlets providing this business. For example, Bank of China, although providing policy loans, can only provide loan services for Ping An's life insurance policies. China Merchants Bank does not provide this service in Shanghai.