Policy loan, also known as policy pledge loan, is a loan obtained by the policy holder from the 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 use the policy loan?

Requirements for policy loans:

1, the policy is valid for more than 6 months;

2. The insurance policy has certain commercial value;

3. Failing to pay the insurance policy in the past two years;

4. The lender's credit status is good, and there is no malicious overdue record;

5. The lender has a stable source of work income;

6. Other conditions stipulated by the bank.

In the Notice of China CIRC on Further Improving the Actuarial System of Life Insurance issued by CIRC, Article 4 clearly stipulates that if an insurance company provides policy loan services, the proportion of policy loan shall not be higher than 80% of the cash value or account value of the policy.

An insurance company may not accept the applicant to pay the personal insurance premium with cash value and repay the policy loan with a credit card.

Extended data:

Policy loans should pay attention to:

1, the policy loan speed is fast, and the general loan arrival time is 1-3 days. For small partners who are in urgent need of money, there is no need to worry about losing their protection because of surrender, and they can also avoid the losses caused by surrender, so policy loans are more suitable for people who need short-term capital turnover.

2. Policy loans must be applied by the applicant or the insured, and entrustment is not allowed. In addition, the policy loan applicant should be 18 years old and legally hold the policy, otherwise it will have no loan effect.

Since the insurance policy is used as collateral, there is no need to find someone to be the guarantor of the loan.

4. The general loan amount does not exceed a certain proportion of the cash value of the policy, and at the same time it needs to bear certain loan interest.

5. Generally, you can't apply for loans for policies that have been exempted from premiums, automatically paid premiums and are applying for claims, depending on the terms of each insurance company.

6. After the loan repayment is completed, don't forget to cancel the policy loan procedures.

How to use insurance policies to get loans online?

Take Ping An Insurance as an example: log in to "Ping An Gold Butler"; Click "Finance"; Select "Policy Loan"; Conduct identity verification and fill in personal information; Confirm the credit authorization and sign it electronically; Add contact information; Sign the contract after confirming that the loan scheme is correct; Carry out video verification; Waiting for the audit results; If approved, the loan will be released immediately.

Extended data;

Loan means that banks, credit cooperatives and other institutions lend money to units or individuals who use money, and generally agree on interest and repayment date. Loans in a broad sense refer to loans, discounts, overdrafts and other borrowing funds. Banks put concentrated money and monetary funds out through loans, which can meet the needs of social expansion and reproduction and promote economic development. At the same time, banks can also obtain loan interest income and increase their own accumulation.

Review the legal status of the borrower, including its legal establishment and continuous and effective existence. If it is an enterprise, it shall examine whether the borrower is legally established and whether it has the qualifications and qualifications to engage in related businesses, and check the business license and qualification certificate. Pay attention to whether the relevant certificates have passed the annual inspection or related verification.

Regarding the credit status of the borrower, check whether the registered capital of the borrower is consistent with the loan; Examine whether there is a clear situation in registered capital flight; Past loans and repayments; And whether the borrower's product quality, environmental protection, tax payment and other illegal conditions may affect the repayment.

In order to reduce the moral hazard of the lender, the borrower and its responsible person should also be specially examined. When issuing loans, financial institutions should not only examine the qualifications, conditions and operating conditions of borrowers, but also strengthen the examination and control of the personal qualities of investors, legal representatives of enterprises and key management personnel.

Interest refers to the remuneration paid by the borrower to the lender in order to obtain the right to use the funds, which is the use price of the funds in a certain period (that is, the loan principal). The loan interest can be calculated in detail by the loan interest calculator. In civil law, interest is the legal fruit of principal.