Policy loan, also known as policy, is a loan obtained by the policy holder from an insurance company with the policy as collateral. Policy holders can get policy loans because their policies have cash value. With the implementation of the balanced premium system, the premiums paid by the insured in whole life insurance at the initial stage of the policy are higher than their current expenditures, thus forming a certain cash value through year-on-year accumulation.

The main functions of policy loans:

1. Through the policy loan, the policy holder can alleviate the temporary financial shortage, and at the same time, his policy will not be invalid. Even if the principal and interest of the loan are not repaid, he can still get compensation if an event within the scope of insurance liability occurs. Moreover, the policy loan procedure is simple, and the borrower does not need any mortgage property such as credit certificate, as long as the policy has a certain cash value, it can be loaned.

2. Through the policy loan, the insurance company pays the insurance premium for the policy holder, so that the policy will not be invalid because of the failure to pay the insurance premium, or the policy holder will not choose the way of obtaining the termination fee through surrender when he can obtain funds through the policy loan to meet other capital needs. In this sense, policy loans are conducive to maintaining the efficiency of insurance companies' policies.

3. If the market interest rate rises, the policy loan increases, the cash expenditure of the insurance company increases, and the funds invested in other assets will decrease accordingly. In more serious cases, if there are too many policy loans, the insurance company may be forced to sell some assets under unfavorable circumstances to obtain cash to meet the policy loans, which will have a negative impact on the operation of the insurance company.

How to apply for a policy loan

What is the process of handling policy loans? Policy loan is a kind of loan method that the lender applies for a loan from the insurance company according to a certain proportion of the value of the policy with the policy held by him as collateral. In the process of mortgage loan, the customer's insurance protection is not affected, and the policy is still valid. So what is the process of handling policy loans? Process of handling policy loans: Under normal circumstances, the applicant needs to bring the policy, the identity cards of the applicant and the insured, and the written statement of the insured agreeing to the loan application, and go to the service counter of the insurance company in person. This business can only be completed after the insurance company approves it. Loans can generally be received within 3 to 6 working days, and interest is calculated from the date of loan transfer. The loan term usually does not exceed 6 months and will be paid off before the next policy anniversary. What is the process of handling policy loans? Bian Xiao reminded everyone that although the policy loan is fast and simple, it must be returned in time within the loan period after the policy loan is completed. If the loan is overdue and the sum of the principal and interest of the loan and other arrears reaches the cash value of the policy, the insurance company will terminate the insurance contract.

How to apply for a life insurance policy loan?

China Bank's life insurance policy refers to a personal business in which the borrower takes the unexpired life insurance policy as pledge, obtains a certain amount of RMB loan from the bank, and repays the loan principal and interest on schedule. The information submitted is as follows: (1) China Bank Life Insurance Policy Application Form; (two) the written commitment of the applicant, the insured and the beneficiary to the pledge; (3) Produce the original valid identity documents of the insured, the insured and the beneficiary (referring to the resident identity card, household registration book or other valid residence identity documents) and provide a copy; (4) The original life insurance policy with cash value issued by the insurance company that signed the insurance agency business cooperation agreement with Bank of China; (five) the insured of group insurance shall provide the written authorization of the applicant when applying for a loan; (6) Notice of Freeze of China Bank Life Insurance Policy and Certificate of Verification of Cash Value of China Bank Life Insurance Policy issued by the insurance company; (7) Other documents or materials required by the lender. As there are some differences between branches, please consult the loan handlers in detail.

The above contents are for your reference. Please refer to the actual business regulations.

What procedures do I need to get a loan from the insurance company?

Provide the policy number, fill in the contract loan application form and the specific loan amount, and then sign for confirmation.

1. Just provide the insurance company with the policy number, fill in the contract loan application form and the specific loan amount, and then sign for confirmation. The rest will be reviewed by the insurance company. If the application meets the requirements, it will be approved on the first day and the loan will be received the next day.

2. Policy loan refers to the loan application made by the insured to the insurance company within the validity period of the insurance contract, and the loan amount can be equivalent to 80% of the cash value of the policy at that time. Compared with other loan methods, the policy loan procedure is very simple. If the borrower fails to perform the debt at maturity, the insurance company has the right to terminate the insurance contract when the loan principal and interest accumulate to the cash value of surrender.

3. It is reported that at present, the annualized interest of insurance policies is between 5% and 6%, and policy loans are more common in life insurance companies, including Xinhua Life Insurance, Taiping Life Insurance and Sunshine Insurance.

Extended data:

Personal insurance is divided into two categories:

(1) is a contract for medical expenses insurance and accidental injury insurance, which belongs to a loss compensation contract and cannot be used as a pledge, just like a property insurance contract;

(2) It is a life insurance contract with saving function, such as endowment insurance, dividend insurance and annuity insurance. As long as the insured pays the premium for more than one year, life insurance policies have a certain cash value, and such policies can be used as collateral.