What is a policy loan_policy loan conditions

What is a policy loan

Usually house mortgage loans, vehicle mortgage loans, and credit loans are familiar to people Loan method, but the user needs funds, but does not have a house or a car, so what should he do if he wants to apply for a mortgage loan? In fact, in addition to houses and vehicles, insurance policies can also be used as collateral to apply for loans.

Policy loan is a kind of mortgage loan, which is a loan that the policy holder can apply for or obtain by mortgaging his policy with cash value to an insurance company or bank. During the loan process, the customer's insurance protection will not be affected. After the user obtains the loan funds, as long as the user repays the debt on time, the policy will still be valid. The specific loan amount that can be obtained when applying for a policy loan is related to the cash value of the policy held by the applicant as collateral, as well as the applicant's personal qualifications, credit, etc. Generally, the maximum loan amount is about 70-80% of the cash value of the policy. For example, if the cash value of the policy is 100,000 yuan, the loan amount is usually around 70,000 to 80,000 yuan. The higher the cash value of the policy, the higher the loan amount the user can obtain.

Currently, insurance policies can be processed through two channels: insurance companies and banks. Policyholders can directly mortgage the policy to the insurance company and obtain loan funds from the insurance company, or mortgage the policy to the bank and obtain loan funds from the bank. Apply for a loan.

Policy loan conditions

Although insurance policies can be used as collateral to apply for loans, not everyone can use insurance policies to apply for loans. Applicants need to meet the loan conditions. The insurance policy used for mortgage also needs to meet the requirements of the lending institution. If you want to apply for a policy loan, you need to meet the following conditions:

1. The applicant is a legal citizen of China and is over 18 years old. Over 60 years old, with full capacity for civil conduct;

2. The applicant has a stable job and income in the location where the loan is located. If the applicant is a civil servant, teacher, doctor, etc., it is easier to apply for a policy loan;

3. The applicant has a fixed residence in the location of the loan;

4. The applicant has a good personal credit record;

5. Insurance policy used for mortgage loans There must be a cash value and the lender will need to provide the original policy.

What kind of insurance policies can be used for mortgage loans?

Only personal insurance contracts such as life insurance, annuity insurance and participating insurance with a savings nature can apply for policy loans.

For most health insurance, short-term accident insurance and medical insurance, there is no loan function because there is no cash value or the cash value fluctuates. In addition to having no cash value, some insurance companies also stipulate that if premium exemptions, reduced payments, and policy advances have occurred, you cannot apply for policy loans.

The conditions for policy mortgage loans are: age 25-55; one of the three items of household registration, work, and residence information must be in the loan location; Taikang, Xinhua, China Life, and China Ping An, and the policy holder pays the premium normally It has been more than 3 years, and there has been no interruption in payment during the payment period, and there has been no change of policy holder in the past year.

Extended information

Customers can choose to repay all or part of the loan at once. If the customer fails to repay the loan and loan interest when the loan expires, the policy loan owed and the accumulated loan interest will constitute a new policy loan, and interest will be calculated based on the policy loan interest rate on the day after the maturity date. If a customer partially repays a loan, their repayments will be used first to repay accumulated interest and then to repay the loan principal. If the borrower cannot repay the debt when due, the insurance contract will be terminated when the loan principal and interest are less than a certain percentage of the policy's cash value.

Notes on applying for a policy loan:

1. The prerequisite for a policy loan is that the policy has been insured for more than two years and there is cash value in the insurance account. Usually, the maximum loan amount provided by the insurance company is It is 70-80% of the cash value of the customer’s policy.

2. Not all policies can be borrowed. Enterprises and individuals who have purchased life insurance, dividend insurance, pension insurance, annuity insurance and other policies with a savings nature can borrow money based on the cash value of the insurance they purchased. Loans of corresponding amounts can be obtained by pledging insurance policies.

3. Insurance policies are only suitable for short-term use and are not suitable for high-risk investments such as stocks.

4. Policy loans must be applied for by the policy holder or the insured, and entrustment is not allowed. Policies that have had premium exemptions cannot be applied for. This kind of situation is relatively common in children's insurance.