With a secured loan, lenders accept an asset—such as a life insurance policy—as collateral to ensure repayment in the event of the borrower's death. This reduces risk for the lender, making loans more affordable through competitive interest rates.
When a life insurance policy is used as security, it can be:
- Fully ceded: Ownership is transferred to the lender for the loan duration.
- Partially ceded: The lender's interest is noted only for the loan amount.
This approach helps individuals secure long-term credit by leveraging life insurance as collateral. However, lenders must regularly verify that the policy remains active, and the cession remains valid.
To streamline this process, Astute has developed a solution that enables lenders to confirm life cover status and amounts through its existing integrations with Life Insurers.
