Policy borrowing means using the policy you purchased to borrow money from your insurance company.
When the policy you purchased begins to have a "policy value reserve (referred to as premium)" as the years increase, you can apply for a policy loan from the insurance company based on your existing premium within the total policy price. Common ones include long-term life insurance, annuity insurance, etc.
The application method is not only simple and convenient, the interest rate is also very good, and the key allocation is also very fast, which is very suitable for short-term capital needs.
But who should apply for a policy loan?
The person who signs the insurance contract with the insurance company, that is, the guarantor, has the right to borrow money.
But it does not mean that the guarantor and the insured must be the same person every time. For example, it is very common for parents to buy insurance for their children. In this case, the guarantor is the parents and the insured is the child.
When the insured and the applicant are different, the insured's signature is required. This is because if the interest on the loan is delayed and unpaid, resulting in the loan principal and interest being greater than the policy value reserve, the policy will be suspended. , thus affecting the rights and interests of the insured, so the signature of the insured is very important.
Policy borrowing actually has many "advantages". In addition to the above-mentioned simple procedures and fast disbursement, various protection functions in the original policy contract are still valid during the borrowing period.
The most important point is that this borrowing behavior model is different from bank loans, because it is borrowed from the insurance premiums you originally paid for use. It is different from ordinary credit that is created out of thin air. Therefore, policy borrowing does not affect personal credit. , will not be included in the joint collection points, and can be repaid at any time.
If the policy loan has not been paid off after one year, remember to set aside an amount to pay the derived interest. If the interest is not paid after the payment period, it will be rolled into the principal for interest calculation.
This should be the same as general loans, but the interest rate of policy loans should be at least a little higher than that of home loans. If you are really inconvenient, don’t forget to leave a sum to pay the minimum interest fee, so as not to The unpaid interest will be incorporated into the principal for the next year and recalculated.
How low can the interest rate be?
Unlike bank loans, where the interest rate fluctuates depending on personal conditions, the interest rate on policy borrowing is always fixed.
That is to say, everyone’s borrowing interest rate is the same. The factor that affects the interest rate is the type of policy. The interest rate of each policy is different, ranging from about 2.7% to 9%. For this aspect, you can check on the official website of the insurance company. Or ask your insurance salesperson.
It should be that many people have paid premiums for more than ten years. Many have already paid the main contract and entered the rider payment. As long as the policy is not too bad, the policy value will have exceeded the value of your long-term payment. Insurance premium paid.
Let's calculate it based on the interest rate of 3%. Suppose you borrow 1 million yuan from insurance, and the monthly interest repayment, excluding the principal, is only 30,000 yuan a year, and the amortization is only 2,500 yuan per month.
100w x 3% ÷ 12 = 2,500
If you know some financial management concepts, as long as you properly use that 1 million yuan, it should not be difficult to help you overcome the difficulties of urgent need and create more value.
The most important thing is that investment policies or savings insurance policies can also be used as proof of financial strength.
When you apply for a large loan from a bank, you are usually required to provide proof of financial resources to adjust your loan figure and floating interest rate. The most common one recently is definitely a home loan.
In addition to the nine proofs of financial resources, you can also submit a policy value statement to the bank as an alternative proof of financial resources.
In case you don’t know what the nine major financial proofs are, I’ll give them a review below.
6 types of income-based financial certificates:
Proof of income transferred from fixed salary, annual withholding voucher, annual income list, current bank passbook, 401/403/405 statements, labor and health insurance details.
3 types of asset-based financial certificates:
Real estate ownership certificates, marketable stocks and fund statements, time deposit certificates.
As for more details, check out what I have written before. What should you pay attention to when applying for a mortgage?
# Insurance # Policy # Loan # Borrowing # Proof of financial resources # Policy value # Linkage # Life insurance # Annuity insurance # Investment # Insured # Insured # Beneficiary # Principal # Rider # Bank # Statement # Payment # Payment # mortgage # parents # children # derivatives # financial management # principal # interest # salary # withholding voucher # passbook # labor health insurance
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