Why you need to buy insurance when borrowing money online

Why you need to buy insurance when borrowing money online

You need to buy insurance when borrowing money online. This is because loan and insurance products are sold in a bundle. relationship, users must agree to purchase insurance before they can submit a loan application. In this case, if the user does not want to purchase insurance, they can try to uncheck the option to purchase insurance and then submit the loan application. If the check cannot be unchecked, the user can apply for other loans that do not require insurance.

After the user purchases insurance, the premium is paid to the insurance company. The lending institution will not charge this fee. Therefore, if the user is willing to pay the insurance premium, this fee cannot be regarded as the upfront cost of the loan.

Is it necessary to borrow money to buy insurance?

It is not necessary to borrow money to buy insurance. If the economy allows, just configure insurance, and give priority to protection insurance. The main functions of protection insurance are to avoid, transfer risks and reduce medical losses.

1. Avoid and transfer risks: To avoid risks and prevent accidents, you can use insurance to protect yourself.

2. Reduce medical losses: With medical insurance as a guarantee, the burden of medical expenses can be alleviated.

Do you need to have a physical examination before buying insurance?

There is no need to take the initiative to have a physical examination before buying insurance. Mainland insurance basically follows the principle of "limited notification." To put it simply, we answer whatever the insurance company asks. If the insurance company doesn't ask me about it, I won't tell it to it.

Without a physical examination, you won’t know about minor ailments that may have occurred in your body. If the hospital doesn’t have records, you don’t need to tell them; but if you go for a physical examination, the hospital will have records, which will give you a solid picture of your health status. It is likely to affect the underwriting results.

What is the role of insurance in loans?

Loan credit insurance means that the insurer guarantees the loan contract between a bank or other financial institution and an enterprise to cover the borrower's credit risk of insurance.

In loan credit insurance, the lender (ie creditor) is the policy holder. When a policy is issued, the lender becomes the insured. When a business is unable to repay a loan, the creditor can receive compensation from the insurer. After receiving compensation from the insurance company, the lender must transfer its creditor's rights to the insurance company, and the insurance company shall pursue reimbursement from the borrower.

The insured amount of loan credit insurance is the entire amount lent by the bank. When determining insurance rates, the insurer considers: the credit standing of the enterprise;

the business management level and market competitiveness of the enterprise; the term and purpose of the loan project; different economic regions, etc.

The use of insurance to avoid loan risks is widely used in the financial field. Commercial bank loans in some developed countries and regions in the world mostly obtain insurance through different forms.

For example, more than 90% of commercial banks in the United States participate in credit insurance. The so-called loan credit insurance is actually a kind of guarantee, which means that the bank, as the right holder, requires the insurance company to provide credit insurance for the guaranteed party.

my country's loan credit insurance for private enterprises first broadens the channels for guaranteeing private enterprises, which to a certain extent alleviates the problem of difficulty in loan guarantees for private enterprises. Private enterprises can obtain loans in a timely manner, which is beneficial to the development of the private economy.

Secondly, it alleviates the contradiction between banking system constraints and increased investment. As the owner of operating credit funds, banks face the risk of not being able to collect loans on time and often require lending companies to provide collateral or guarantees.

As a kind of guarantee, loan credit insurance can ensure the safety of bank credit funds and relieve the bank's worries. For the domestic insurance industry that is still waiting to develop, it not only provides an effective way to develop new insurance types, but does not require additional costs. Bank-insurance cooperation is getting deeper and deeper, so you might as well give loan credit insurance a try. It should be said that this is a good entry point.

Credit insurance can solve the urgent need for loans. With personal credit, without collateral or guarantor, as long as you buy insurance in advance, you can get small consumption from the bank in 3 to 5 working days. Loans to meet urgent needs are the direct effect of credit insurance loans.

Why do bank loans require insurance?

The state requires people who need loans to buy insurance.

The basis for banks to require lenders to purchase insurance is the "Personal Housing Loan Management Measures" of the People's Bank of China.

Article 25 of the "Measures" stipulates: "If a real estate is used as a mortgage, the borrower must apply for house insurance before signing the contract or entrust the lender to handle the relevant insurance procedures. During the mortgage period, the insurance policy will be kept by the lender." Because of this clause There are no implementation details, so each bank has stipulated many terms on its own.

From the bank's point of view, in order to resolve risks, when the borrower is unable to repay the loan under the circumstances stated in the insurance contract, the insurance company will repay the principal and interest on behalf of the borrower. From the borrower's perspective, it is also a transfer of risk. In the event of death (such as a serious illness or other circumstances specified in the contract), the burden of repayment will be reduced.

The legal community has different views on the above-mentioned regulations of the People's Bank of China. Some people believe that this provision is only a departmental regulation, which is lower in legal efficiency than national laws and administrative regulations and cannot be contrary to it. Others believe that banks use their monopoly advantages to force lenders to insure housing property insurance and benefit from the bank, which is contrary to the spirit of the Civil Law, Insurance Law and Anti-Unfair Competition Law. The actual operations of various commercial banks are even more biased than Article 25, which completely expands the illegality, unreasonableness and unfairness of Article 25, which not only increases the burden on home buyers, but also harms the interests of consumers. It is illegal for banks to require lenders to insure the full amount of the loan.

According to regulations, lenders only need to insure the principal and interest of the loan. The insurance is divided into full insurance and insufficient insurance. Consumers can choose the amount of insurance and do not have to insure the full price of the house; in addition, the People's Bank of China "Article 25" does not stipulate who the beneficiary is, but each bank requires the lender to set the beneficiary as the bank. As a property insurance contract, "housing loan insurance" cannot designate a beneficiary, and the insurance company has no right to designate the "first beneficiary." It is obviously unreasonable that the person who buys insurance is not the biggest beneficiary of the insurance.

General bank loans do not require insurance, but some banks generally require insurance on the basis of loan requirements in order to control risks.

The following is an introduction to the conditions required for a loan: provide a valid identity document from the bank. The bank requires borrowers to be between 20 and 60 years old. The borrower is a natural person with full capacity for civil conduct. The loan applicant has good credit standing and has no recent overdue behavior. Have a stable job and proof of reasonable income. Other conditions required by the lending bank.

If the loan amount is large, the bank will generally require insurance on the basis of the loan requirements in order to control risks. The following will introduce you to the conditions required for the loan: the borrower has a valid identity document. In principle, borrowers are between 20 and 60 years old. The borrower has full capacity for civil conduct and has a permanent residence or valid residence status in the loan area. The loan applicant has good credit standing and willingness to repay. With the loan, you must have a stable workplace and a certificate of employment from the employer. There are specific instructions for the purpose of the loan.