In fact, with the deepening of business transformation, more than 70 insurance companies have launched policy pledge loan business last year, with the business scale exceeding 430 billion yuan, an increase of about 26% over the same period last year. This also reflects from the side, the driving force of insurance companies on policy pledge loans and the degree of consumer preference for this business.
With the rapid growth of insurance policy pledge loan scale, the interest rate of insurance policy loan for individual insurance enterprises also rises. Reporters of China Life, Beijing University Founder, Sino-Italian Life, Agricultural Bank of China Life, Shanghai Life and more than 10 insurance policy loans, found that the annual interest rate of these insurance policy loans mostly fluctuated around 5%, the highest product interest rate as high as 8.35%.
Relevant person in charge of individual insurance of insurance companies told reporters that, although policy pledge loan was a good product function before, it was not regarded as an important selling point by insurance companies. With the deepening of the transformation of insurance companies, this function has prominent advantages in enhancing liquidity, especially in the impact of a large number of short-term financial products in bank and insurance channels. Next, the advantages of Policy-backed loans become more and more obvious.
Policy loan refers to a kind of loan method that the policy holder mortgages the insurance policy to the insurance company and obtains funds according to a certain proportion of the cash value of the policy, which is used to solve the short-term capital turnover needs of the policy holder.
In this process, because the guarantee products generally have a long life, the time that the funds need to be deposited in the insurance company is also longer. Once the investors temporarily have a shortage of funds or poor turnover, it will be difficult to obtain effective liquidity, and the policy pledge effectively solves this problem.
Data show that in 2018, the total amount of policy pledge loans of 71 insurance companies with data available was 434.7 billion yuan, an increase of 26% compared with 2017. Among them, China Life and Ping An Life are more than 100 billion yuan.
In 2015, when the premium of various short-term and medium-term products is relatively high, the industry policy pledge loan is only 230 billion yuan, and the rapid growth of policy pledge loan can be described as a free ride for the industry transformation.
Policy pledge loan not only promotes insurance sales, but also brings considerable interest income to insurance companies. Data show that China Insurance Corporation reported in its annual report in 2018 that the interest income of policy pledge loan was 174 million yuan last year, accounting for 0.03% of the companys total revenue. Xinhua Insurances annual report for 2018 shows that the interest income of policy pledge loan was 1.368 billion yuan last year (Xinhua Insurances net profit in 2018 was 7.922 billion yuan), accounting for about 0.89% of total revenue.
Usually floating around 5%.
With the growth of policy pledge loans, the interest rates of individual insurance companiespolicy loans have also increased.
According to the Securities Daily reporter on China Life, Xinhua Insurance, Founder, Sino-Italian Life, Agricultural Bank of China Life, Shanghai Life and other insurance companies, the policy lending rate generally fluctuates around 5%.
According to China Lifes previous Announcement on the Interest Rate Related to Policy Services, the benchmark annual interest rate for corporate policy borrowing has been 5.5% since December 30, 2018. Founder Life of Peking University also announced that from January 1, 2019 to June 30, 2019, the interest on policy loans and premium arrears is calculated at an annual interest rate of 5%. In addition, Sino-Italian Life announced that since January 1 this year, the annual interest rate of policy loans (including automatic loans) is 6%.
From the point of view of the loan period of insurance policy loan, according to the Securities Daily reporters, most of the current insurance companies have a loan period of six months, which can be renewed. If they fail to repay the loan at maturity, most insurance companies will include interest in the new loan. In terms of loan ratio, most products can lend 80% of the cash value of the policy.
In fact, in the actual operation, investors can either take insurance policies to the insurance company for loans, or take insurance policies as collateral to the bank for loans, so what is the difference between the two?
In the view of the industry, there are pros and cons in going to insurance companies and banks. For example, from the point of view of loan quota, according to the provisions of the Banking and Insurance Regulatory Commission, the amount of insurance policy loans can not exceed 80% of the cash value of the insurance policy. The bank also uses the cash value of the policy to calculate the quota, but the upper limit is not limited to 80%. It also considers the borrowers credit information and income and financial situation to increase the quota. In terms of interest rate, bank policy loans are mainly divided into pledge loans and credit loans, among which the interest rate of credit policy loans is higher than that of insurance enterprises.
The person in charge of the relevant departments of the Banking and Insurance Regulatory Commission said that consumers should enhance their self-prevention awareness and handle the withdrawal or pledge of insurance policies with caution. Dont be deceived by the so-called high returns. Dont sign a private agreement with the so-called agents. Dont easily show or entrust the holders of insurance policies, personal identity documents, etc. in order to avoid being surrendered or being financed without knowing it.
Source: Liable Editor of Securities Daily: Yang Qian_NF4425