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Personal policy loans are not serious consequences

Time: 2013-11-12         Source: Rong 360 original         Author: bamboo

        Mr. Zhang, who is a small business, has been in a hurry and is in urgent need of a cash flow, but the bank loans have tightened and the approval time is long, which is far from being thirsty. In anxious moment, Mr. Zhang remembered that he had bought a few large insurance policies in his hand, and immediately went to the insurance company, and quickly got a cash through the policy loan. In the context of tight credit, more and more business owners are achieving rapid financing through policy loans.

A policy loan is a form of financing in which a policyholder directly pledges a policy held by an insurer to an insurance company and obtains funds in proportion to the cash value of the policy. Policy loans are simple and convenient, but if they are not, what will happen?

It is reported that when repaying, the borrower can choose to repay or partially repay in one lump sum. If the borrower fails to repay the loan and loan interest at the expiration of the loan, the outstanding policy loan and accumulated loan interest will constitute a new policy loan, which will bear interest at the latest policy loan interest rate and will be compounded every six months. If the borrower partially repays the loan, the repayment will be used first to repay the accumulated interest and then used to repay the loan principal. If the borrower fails to perform the debt repayment at the end of the period, 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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