Customers can take their own policies to insure corporate loans, and Ping An can take 80% of the funds available to customers in this account, with very low interest, which is equivalent to interest-free loans.
2. What does a policy loan mean?
Policy loan is a loan obtained from an insurance company with the cash value of life insurance policy as the guarantee. The one-time loanable amount of such loans depends on the effective year of the policy; The age of the insured and the amount of compensation for death when the policy is issued. The so-called policy loan refers to a loan method in which the insured mortgages the policy he holds to the insurance company and obtains funds according to a certain proportion of the cash value of the policy. Since the customer's insurance protection is not affected in this process, the policy is still valid. Policy loan is a loan obtained from an insurance company with the cash value of life insurance policy as the guarantee. The one-time loanable amount of such loans depends on the effective year of the policy; The age of the insured and the amount of compensation for death when the policy is issued. Although recent insurance policies usually only allow borrowing at interest rates linked to the money market, the interest rate of such loans to policy holders is often lower than the market interest rate. The main types of policy loans are 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 cash value is an important factor in evaluating whether a policy can be loaned, it is not only the policy with high cash value that can be loaned. The most typical example is linked insurance. The policy loan time is short, generally 6 months. There are also companies that can automatically renew their loans after maturity. When repaying, customers can choose to repay in full or in part at one time. If the customer fails to repay the loan and loan interest when the loan expires, the owed policy loan and accumulated loan interest constitute a new policy loan, and the interest is calculated according to the policy loan interest rate on the next day of the maturity date. If the customer partially repays the loan, the repayment will be used to repay the accumulated interest first, and then to repay the loan principal. If the borrower fails to perform the debt at maturity, the insurance contract will be terminated when the loan principal and interest are lower than a certain proportion of the cash value of the policy. The premise of policy loan is that it has been insured for more than two years and the insurance account has cash value. Usually, the maximum loan amount provided by insurance companies is 70%-80% of the cash value of customers' policies. Moreover, not all insurance policies can be loaned. Enterprises and individuals who have purchased insurance policies with savings nature such as life insurance, dividend insurance, endowment insurance and annuity insurance can make corresponding loans in the form of policy pledge according to the cash value of the purchased insurance.
3. What do you mean by policy loan extension?
If the loan cannot be repaid within the loan term agreed in the contract, the borrower may continue to use the loan with the consent of the lender. If the borrower applies for extension, it shall apply to the lender before the loan expires. According to the borrower's application, the lender investigates the borrower's failure to repay the loan on time and rearranges the use of the funds.