Maybe you have bought various types of insurance, but do you know that your insurance policy can also be used for loans? Let's take a look at what a policy loan is and how to repay it.
The so-called 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. Since the customer's insurance protection is not affected in this process, the policy is still valid. This is also one of the main reasons why many people choose policy loans. After all, you can get a loan in this way without losing your insurance rights.
Because there are many types of insurance, the types of policy loans can also be divided into many types. Let me briefly list some of them:
1. Loans obtained from insurance companies are guaranteed by the cash value of life insurance policies.
The one-time loanable amount of such loans depends on the effective year of the policy; The age of the insured and the amount of compensation for death when the policy is issued. Although some insurance policies usually only allow borrowing at the expected annualized interest rate linked to the money market, the expected annualized interest rate of such loans to policy holders is often lower than the expected annualized interest rate of the market. If the insured fails to repay the loan, the principal and interest of the loan will be deducted from the death compensation in the life insurance policy. Under normal circumstances, policy loans can only be targeted at policies with' cash value'. Long-term life insurance with saving nature, such as endowment insurance, whole life insurance, endowment insurance, universal insurance and dividend insurance, will have cash value after one year of insurance, and the longer the payment time, the higher the accumulated cash value. These policies can usually be used for policy loans, but the specific situation depends on the specific terms in the insurance contract.
2. Short-term accident and health insurance.
Because there is no cash value, or the cash value is very low, such policies cannot be used for policy loans. Although cash value is an important factor in evaluating whether a policy can be loaned, it is not only the policy with high cash value that can be loaned. The most typical example is linked insurance. As an insurance with investment function, investment-linked insurance with a premium of more than 100,000 yuan is not uncommon, and it will soon accumulate considerable cash value. Although investment-linked insurance has cash value, it cannot be determined because its value fluctuates with the price of the investment unit, so it is generally impossible to make a policy loan.
In addition, we are most concerned about the loan amount, time and expected annualized interest rate, and also briefly talk about:
Similar to general pledge, the reference index of policy loan amount is the "cash value" of the policy. According to the regulations, the policy loan ceiling is calculated according to a certain proportion of the cash value of the policy, and each company is different. For example, the regulations of Pacific, China Life and Taiping Life are 80%; AIA and Allianz are 70%. Since the specifications of policy loans are formulated by the CIRC, there is little difference among major insurance companies.
The policy loan time is short, generally 6 months. There are also companies that can automatically renew their loans after maturity.
If you have a loan, you must pay it back. How to repay the policy loan? Is the insurance contract still valid after repayment?
It is understood that customers can choose to repay all or part of the repayment in one lump sum. 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 expected annualized interest rate of the policy loan 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.
The following are the things you need to pay attention to when repaying:
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. The insurance policy is only suitable for short-term use, not suitable for high-risk investments such as stocks.
4. Policy loans must be applied by the applicant or the insured, and may not be entrusted; Insurance policies that have been exempted from premium cannot be handled, which is more common in children's insurance
What is the loan insurance policy?
Loan credit insurance refers to the insurance that the insurer guarantees the loan contract between banks or other financial institutions and enterprises and underwrites the credit risk of borrowers. In loan credit insurance, the lender (that is, the creditor) is the applicant.
When the policy is issued, the lender becomes the insured. When the enterprise cannot repay the loan, the creditor can get compensation from the insurer. After obtaining compensation from the insurer, the lender must transfer the creditor's rights to the insurer, and the insurer will recover from the borrower.
Extended data:
Significance of developing credit insurance for private enterprises in China;
First, it broadens the guarantee channels for private enterprises and alleviates the problem of loan guarantee for private enterprises to some extent. Private enterprises can get loans in time, which is beneficial to the development of private economy.
Second, it eased the contradiction between the constraints of the banking system and increasing investment. As the owner of operating credit funds, banks are faced with the risk of not being able to recover loans on time, and often require loan enterprises to provide mortgages or guarantees. As a guarantee, loan credit insurance can ensure the safety of bank credit funds and relieve the worries of banks.
Third, for the domestic insurance industry to be developed, it not only provides an effective way to develop new types of insurance, but also does not need to increase additional costs. At present, the cooperation between bank and insurance is deepening day by day, so loan credit insurance may as well try. It should be said that this is a good starting point