Pawning life insurance - how it works
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WHICH INSURANCE POLICIES CAN I PAWN?
You can use capital insurance in pawnshops like CASHY - i.e. the following insurance policies for a pawn loan:
Endowment insurance
Death and endowment insurance
Unit-linked life insurance
Index-linked life insurance
Future pension plan with subsidized premiums
WHAT REQUIREMENTS MUST MY INSURANCE MEET?
In order to be able to pawn your insurance, there must be a cash surrender value that can be terminated and paid out within the following 24 months. We need the following information from you for the check:
E-mail address
Phone number
Policy number
Desired loan amount in Euro
HOW DOES THE PROCESSING OF MY PAWN LOAN WORK?
After you have provided your policy number, your desired loan amount and your contact details, you sign a power of attorney with CASHY for information about your insurance. The possible loan amount depends on the surrender value of your insurance, premium arrears and the earliest possible termination option.
If you are approved for your pawn loan, you can either bring your policy to a CASHY store, have it sent to you or have it collected via a pick-up service.
The following required documents will be signed by you:
Pledge contract: This contract regulates the pawning of your policy.
Notice of pledge: This letter informs your insurance company that your policy is being pawned.
Power of attorney for recovery: You authorize CASHY to cancel and repurchase your policy in the event of non-repayment.
Blank termination form: This document is required in the event of termination.
After confirmation from your insurance company, an updated policy will be issued and your pledge loan will be paid out to you immediately. You can pay out in cash, via PayPal or by bank transfer.
WHY SHOULD I OPT FOR PAWNING INSTEAD OF LIQUIDATION?
Quite simply, the sale or termination of your insurance is final and cannot be reversed. So if you only need the money for a short-term bridging period, a pawn loan makes more sense. Your insurance will continue to run during this time and can be continued as normal once the loan has been repaid.
ADVANTAGES AND DISADVANTAGES
Below you will find the most important advantages and disadvantages of pawning your insurance:
ADVANTAGES | DISADVANTAGES |
|---|---|
You do not need any further collateral. | The interest rate is higher than for a bank loan. |
Your credit rating will not be checked. | The contributions are not tax-deductible during this period. |
You can repay and cancel your pawn loan at any time. | You can't pawn just any type of insurance. |
The interest rates are generally lower than, for example, when paying in installments for credit cards. | A pawn loan is not suitable for long-term financing. |
You will receive the surplus if the pawnshop has to sell or liquidate your insurance. |
THE MOST IMPORTANT DIFFERENCES TO A CONVENTIONAL LOAN
The following points distinguish a pawn loan from a bank loan or similar forms of financing:
Your credit rating is not checked and does not play a role
Your financial situation is completely irrelevant and remains anonymous.
You do not need any further collateral such as an incoming salary.
You are not personally liable for a pawn loan and will be paid out the possible surplus less fees if you are unable to repay your loan.
ALTERNATIVES
If you are unable to pawn your insurance, the following alternatives are available to you:
Car pawn: You use your car as collateral instead of your insurance and can borrow money against it depending on its market value. Enter your vehicle details in the car pawn calculator and your highest possible loan amount will be displayed immediately.
Pawning items: Can't pawn your insurance? You can also pawn many other items at the pawnshop - e.g. electronics, luxury watches, jewelry & coins, bicycles & e-scooters, designer bags and much more.
Set up an overdraft facility: If you have a monthly salary, you can get an overdraft facility of up to three months' salary. Just ask your bank advisor.
Salary advance: If your credit rating is poor, you can ask your employer for an advance payment. Usually, you will be granted this financing if it can be paid with your next vacation pay or payable overtime.
Personal loan: This can be a loan from the bank, a loan from a private individual or a loan from friends or family.
IMPORTANT QUESTIONS
Can anyone pawn an insurance policy?
Yes, if the insurance company meets the above requirements, there are no hurdles to lending.
What do I need to consider before pawning my insurance?
Your insurance must have a cash surrender value that can be paid out within the following 24 months in order to be able to pawn it.
How quickly will I receive my money from the pawnshop?
Once your insurance has been checked and received, you will receive your money immediately in cash at CASHY in the store, a PayPal or bank transfer will be in your account on the following working day after receipt of the documents.