What are the tips for policy loans?
Speaking of the policy, many families now have more or less. However, not all people who have bought insurance have a clear understanding of the function of the policy. Take the mortgage function of the policy, for example, when many people need funds to turn around at a time, and it is not convenient to borrow money from relatives and friends, is there any insurance policy that looks at the hand? If you surrender your insurance, you will suffer losses and take a lot of risks. At this time, you may wish to consider the realization of the policy to solve your own urgent needs. Let's take a look at it.
First of all, the policy does have the function of “realizing”, called “policy mortgage function”.
A policy mortgage loan refers to a form of financing in which a policyholder directly mortgages a policy held by an insurer to an insurance company and obtains funds according to a certain percentage of the cash value of the policy. If the lender fails to perform the debt at the end of the period, the insurance company has the right to terminate the validity of the insurance contract when the loan principal and interest accumulate to the surrendered cash value.
When it comes to the policy to be able to lend, what is the amount, time and loan interest rate of the policy loan?
Amount: Similar to a general mortgage, the reference indicator for a policy loan amount is the “cash value” of the policy. (Cash value of the policy = paid premium - management fee of the insurance company - the insurance company has assumed the pure premium required for the policy insurance liability + interest earned on the remaining premium)) Since the policy mortgage loan is secured by the policy cash value, the loan The amount cannot exceed the cash value of the policy. Usually, the insurance company stipulates a ratio of about 70% of the policy's cash value.
Time: The time for a policy loan is short, usually half a year, but the policyholder can also apply for an extension.
Loan interest rate: The policy loan interest rate is different from the bank commercial loan interest rate. Generally speaking, the policy mortgage interest rate is determined by each insurance company according to its own business conditions, and does not violate the relevant national financial regulations. Compared with the bank loan interest rate, the mortgage rate of the policy is relatively higher.
Is all insurance policies available for loan realization?
Long-term life insurance with savings nature, such as two-insurance, life insurance, pension insurance, universal insurance and dividend insurance. After one year of insurance, the policy begins to have cash value. The longer the payment, the more accumulated cash value. high. These policies are usually available for policy loans, but the specific circumstances are based on the specific terms of the insurance contract.
It should be noted that not all policies can be used for mortgages. Such as short-term accident insurance and health insurance, because there is no cash value, or the cash value is very low, such policies cannot be used for policy loans.
Although the cash value is an important factor in assessing whether a policy can be used for a loan, it is not a policy loan that can be made as long as it has a higher cash value.
For example, investment insurance. As an investment-type insurance, the insurance premium of more than 100,000 is not seen in the investment guarantee
, and it will soon accumulate considerable cash value. However, because its value fluctuates with the price of the investment unit and cannot be determined, it is generally impossible to make a policy loan.
In addition, medical insurance insurance and property insurance do not have the conditions for mortgage, and cannot be used for policy loans. At the same time, children's insurance with premium exemption cannot handle loans.
What is the loan repayment of the policy? Is there anything that needs attention?
When repaying, the lender can choose to repay or partially repay it all at once.
If the loan and loan interest are not repaid when the loan expires, the outstanding policy loan and accumulated loan interest will constitute a new policy loan, which will bear interest at the last policy loan interest rate and will be compounded every six months.
If the lender chooses to partially repay the loan, its repayment will be used first to repay the accrued interest and then used to repay the loan principal. If the lender fails to perform the debt repayment, the insurance company terminates the validity of the insurance contract when the principal and interest of the loan reaches the surrender amount.
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