Policy loan is a pre-payment of the insurance benefit of a life insurance enterprise to the insurant.

General information

The policy loan is after the height limited limited to the guaranteed repurchase value or the repurchase value inclusive surplus portions less Kapitalertragssteuer (the loan to value ratio in accordance with "§176 VVG). Since temporary life insurances do not form capital, here no policy loan is possible. The insurance borrows thus quasi its money already saved to the customer and has therefore no credit loss risk.

For this reason the policy loan is usually interest-more favorable than an installment credit or an arrangement credit.

The policy loan is an alternative to the notice or the secondary market for life insurances of the life insurance.

Usually variable interest charges are agreed upon. An entry in the Schufa does not take place.

Repayment

The regular repayment takes place at height of the agreed upon rates. It can be done also without a current repayment. In this case the interest is to be only paid by the customer.

The repayment of the remainder generally takes place with maturity of the life insurance and/or the next contractually agreed upon partial disbursement via accounting with the expiration achievement.

Special repayments by the insurant are possible.

Pawned insurance

If the insurance contract is (e.g. retired pawned as credit security or, must that-third-entitled the policy loan to agree. The same applies to the beneficiary with an existing irrevocable subscription right.

Legal

The policy loan is not a loan in the legal sense, but an advance on the insurance benefit which can be expected. The interest places therefore also no interests on loans, but a increased insurance premium.

Legally disputed, is whether the policy loan in accordance with "§491 BGB as consumer loan be classified not nevertheless must. From this further rights for the applicant for the credit (e.g. a right of revocation) arose.

Consequences of payment arrears

If the interest is not paid on the policy loan, then this is considered as non-payment of life insurance contributions. The insurance is then (after reminder) justified to the notice of the policy loan. The policy loan is then settled from the saved covering capital of the life insurance.

Fiscal aspects

By the agreement of a policy loan itself an income tax obligation for the yields of the life insurance can devoted ("“tax injurious character"”).

The life insurance is obligated, policy loans of more than 25,565 to indicate 00 EUR to the tax office.

See also

• Life insurance
• Installment credit

Related links

• Consumer center for legal classification

Articles in category "Policy loan"

We found here 9 articles.

Related Websites

We found here 4 related websites.

• Life Insurance Policy Loan - Insurance Advice
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• Outstanding Life Insurance Loan Plus Interest Exceeds The Policy ...
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• Policy Loan
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• policy loan Definition
  policy loan - definition of policy loan - A loan made by an insurance company to a policyholder on the security of the cash value of the policy.