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Why should I buy loan insurance when I borrow from a bank?
In fact, the bank requires the lender to take out insurance on the basis of the Measures for the Administration of Personal Housing Loans of the People's Bank of China. Article 25 of the Measures stipulates: "If real estate is used as collateral, the borrower shall go through the relevant insurance formalities at home insurance or entrust the lender to handle it before signing the contract. During the mortgage period, the insurance policy shall be kept by the lender. " Because there are no detailed rules for the implementation of this clause, the bank has set many clauses on its own.

The legal profession has different views on the above provisions of the People's Bank of China. Some people think that this provision is only a departmental regulation, and its legal effect is lower than national laws and administrative regulations, so it cannot run counter to Dafa. Others believe that banks use their monopoly advantage to force lenders to take out housing property insurance and profit from it, which violates the spirit of civil law, insurance law and anti-unfair competition law. However, the actual operation of commercial banks is more severe than Article 25, which completely expands the illegality, irrationality and unfairness of Article 25, not only increases the burden on buyers, but also harms the interests of consumers. It is illegal for banks to require lenders to be fully insured. According to the regulations, the lender only needs to insure the principal and interest of the loan, and the insurance is divided into full insurance and insufficient insurance. Consumers can choose the insured amount, not necessarily according to the full price of the house; In addition, Article 25 of the People's Bank of China does not specify who the beneficiary is, and all banks require lenders to set the beneficiary as a bank. As a property insurance contract, "housing loan insurance" cannot specify the beneficiary, and the insurance company has no right to specify the "first beneficiary". It is obviously unreasonable that the insurer is not the biggest beneficiary of insurance.

Although there is controversy about the provisions of the People's Bank of China in theory, it has not fundamentally affected the actual operation of loan insurance in practice.