1. Stand-alone arrangement/contract: Premium financing is a stand-alone arrangement between you and the lender. It is not, and does not form part of the insurance contract between you and the Insurer. The Insurer is not a party to the loan contract or policy assignment agreement and is therefore not governed by the terms and conditions (including dispute resolution) of these contract and agreement you enter into with the lender. In case you have any questions about the terms and conditions, you should contact the lender.
2. Restriction of rights under the Policy: All or part of your rights under the Policy will be assigned to the lender as collateral via a deed of assignment. Subject to the terms and conditions of the loan contract and policy assignment agreement, the lender will be entitled to exercise all or part of the rights under your Policy, and you will not be able to exercise those rights unless the lender’s approval is obtained. Examples of those rights include: • receive any benefits (including surrender value, death benefit, etc. ) payable by the insurer under your Policy; • cancel your policy within the cooling off period, surrender the policy, or make withdrawals; • apply for policy loan, or exercise any options under the policy; and Annex • make certain changes or amendments to your Policy (e.g. appointment of new beneficiary, further pledge or assign the policy). You should therefore carefully read the terms and conditions of the loan contract and policy assignment agreement, and consider how these potential adverse impacts may affect the outcome of the Policy and whether the Policy is still suitable for you.
3. Shortfall in actual benefits receivable: The actual net benefits receivable under the proposed policy financed by premium financing will be less than the amount indicated in the relevant Benefit Illustration, as part of the benefit payments would be offset by the repayment of the loan facility (including the principal amount of the loan and the relevant interest). This shortfall may be significant especially if you intend to pay a substantial portion of the premium using premium financing.
4. Release and access of information: The lender will be given rights to access your policy information and may from time to time instruct the Insurer to release information relating to your Policy, for example, surrender value, cash value, and any loans or advances on the Policy.
5. Risk of collateral top-up and repayment on demand: Your loan facility may be subject to review by the lender and the lender has the right to restructure or terminate the loan facility at any time. The lender may request you to provide additional collateral, or partially or fully repay the outstanding loan, under particular circumstances stated in the loan contract. If you fail to meet the request(s), the lender may restructure or terminate the loan facility or exercise its rights on the Policy such as surrendering the policy. You should read the terms and conditions of the loan contract, for example the frequency of review, the circumstances that may trigger the request(s) and the relevant arrangements of the request(s). You should consider your financial affordability in meeting the particular circumstances stated in the loan contract before purchasing life insurance products through the use of premium financing.
6. Consequence of late repayment and default of loan facility: If the Policy is funded by a loan facility, you are obligated to repay the outstanding loan amount and interest payments according to the repayment schedule under the terms and conditions of the loan contract. Any late or default of loan repayment over the course of the loan facility, including interest payment and principal repayment, may trigger the lender to demand the repayment of the loan immediately. The lender may surrender the policy and recover the defaulted payment, causing you significant financial losses and loss of insurance coverage. You may not be able to obtain the same insurance coverage for reasons such as changes in health conditions. You shall remain liable for any shortfall between the amounts of the proceeds of the policy and the outstanding amount of the loan facility. In addition, the lender may set off any obligation under the loan facility owed by you to the lender against any obligation owed by the lender to you (including credit balances in any account you maintain with the lender).
7. Impact of early termination/surrender/withdrawal: If the lender exercises its right under the terms and conditions of the policy assignment agreement to terminate or surrender the policy, or withdraw cash value before the end of policy term:
   • the amount of benefits receivable under the policy may be substantially less than the sum of total premium paid, interest expenses incurred and early repayment penalty imposed (if applicable) under the loan contract, especially in the early years of the policy;
   • you may partially or fully lose the insurance coverage and may not be able to obtain the same insurance coverage;
   • you may lose the entitlement to dividends, bonuses, etc. under the policy;
   • the lender may apply all or part of the benefits receivable under the policy against the outstanding amounts owed by you (whether or not the outstanding amounts are under the loan facility); and
   • in cases where the policy is required as part of conditions in your business or other arrangements, the termination of the policy may trigger further events of defaults in these arrangements with adverse consequences.
8. Impact of death of insured: In the event of the death of the insured, the amount of death benefit receivable under the policy may be substantially less than the sum of total premium paid, interest expenses incurred and early repayment penalty imposed (if applicable) under the loan contract, and you may suffer a significant financial loss.
9. Exposure to interest rate fluctuation: The interest payment of the loan facility for premium financing will affect the net rate of return (i.e. net of interest payment) you plan to achieve in your Policy with the use of premium financing. You may be exposed to significant interest rate risk if the interest rate of the loan facility is not fixed (i.e. floating rate subject to changes from time to time). Even in the case of fixed interest rate, the lender may have discretion to adjust the interest rate on the loan facility from time to time. Any increase in interest rates applicable to the loan facility will increase the cost of servicing the loan facility (i.e. increase in regular interest payments.). You may not be able to service the loan facility and may hence default when there is a substantial increase in the interest rate. Also, in cases where the interest rate of the loan facility is substantially higher than the returns received from the policy, you will suffer a significant financial loss.
10. Exposure to risk of non-guaranteed benefits fluctuation: If your Policy includes non-guaranteed benefits, the projected non-guaranteed benefits shown in the Benefit Illustration are determined under the assumed investment return and are not guaranteed. If the investment return assumed for your Policy is not achieved, your non-guaranteed benefits may be lower than those illustrated or substantially lower than the interest applicable to the loan facility, and in certain circumstances, may even be zero. If the total return generated by the Policy is substantially lower than the interest payable under the loan facility, you will suffer a significant financial loss.
11. Exposure to exchange rate fluctuation: Exchange rate exposure arises when the loan currency differs from the policy currency. In the case of premium financing, you may be required to convert the proceeds received under your Policy into the loan currency, Annex under the prevailing exchange rate, before being able to settle the loan repayments. In cases where the proceeds received from the policy is substantially lower than the outstanding loan amount due to adverse fluctuation in the exchange rate, you will suffer a significant financial loss.
12. Exposure to credit risk: You are subject to the credit risk of the Insurer. In the event that the Insurer becomes default on its obligations or an adverse change in its credit rating, the lender may, at its discretion, ask for additional collateral, adjust your credit limit, restructure or even terminate the loan facility. You may be obligated to repay the loan, the interest and administrative fee accrued immediately, and you shall remain liable for any shortfall between the amounts of the proceeds of the policy and the outstanding amount of the loan facility.
13. Payment timing mismatch: There is a possibility that the proceeds from your Policy will not be remitted to the lender on or before the repayment date as specified in the loan contract (e.g. due to loan facility maturity date being earlier than your policy maturity date, or turn-around-time for policy benefits disbursement), resulting in the default of loan repayment by you. You will be solely liable for any late penalty interest or defaulting interest imposed by the lender under the terms and conditions of the loan contract.
14. Impacts on cooling-off right: Your right to cancel this Policy within the cooling-off period may be assigned to the lender, and therefore any cancellation request may be subject to the lender’s consent. For a policy acquired through the use of premium financing and cancelled within the cooling-off period, you may be obligated to repay the loan principal, early repayment penalty (if applicable), interest and other administrative fee accrued under the premium financing facility.

* All figures and examples shown are for illustration purposes only. They are based on a number of assumptions that are not disclosed on this webpage/page and are not guaranteed. Please also refer to the Risk Disclosure and the Important Notes
^ The approval of the premium financing facility (or the “facility”) is subject to the final decision of Standard Chartered. The amount of premium financing is calculated by reference to the Loan-to-value ratio of the Surrender Value or Total Policy Value of the eligible insurance plan as at policy issue date as well as other factors at the absolute discretion of Standard Chartered.

The information on this page is for general information and for reference purposes only. It does not constitute a contract of insurance or Premium Financing or an offer, invitation or recommendation to any person to enter into any contract of insurance or Premium Financing. Customers must not rely on the information in this page alone in entering into any transaction. Specific professional advice is recommended.

Standard Chartered is an insurance agent of Prudential. The life insurance policies are life insurance products underwritten by Prudential Hong Kong Limited (a member of Prudential Plc group) (“Prudential”) and distributed by Standard Chartered Bank (Hong Kong) Limited (“Standard Chartered”). Some of these plans may have a savings element and are not an alternative to ordinary savings or time deposits. Part of the premium pays for the insurance and related costs.
If you are not happy with your policy, you have a right to cancel it within the cooling off period and obtain a refund of any premium and levies paid, less any withdrawals (if applicable), provided that no claim has been made under the policy. A written notice of cancellation signed by you should be received directly by the Prudential’s Office within the cooling off period (that is, within 21 calendar days immediately following either the day of delivery of (1) the policy or (2) the notice (informing the availability of the policy and expiry date of the cooling-off period) to the customer or your nominated representative, whichever is earlier). After the expiration of the cooling off period, if you cancel the policy before the end of the term, the projected total cash value (if applicable) may be less than the total premium you have paid. You should check with Prudential if you have any doubt regarding your cooling-off right.

As the issuer of the life insurance policies, Prudential will be responsible for all protection and claims issues. Prudential is not an associate or subsidiary company of Standard Chartered. Please refer to the policy for full terms and conditions. Standard Chartered does not accept any responsibilities regarding any statements provided by Prudential or any discrepancies or omissions in the contract of insurance nor shall Standard Chartered be held liable in any manner whatsoever in relation to your contract of insurance.

The information of on this page is intended to be distributed in Hong Kong only and shall not be construed as an offer to sell or solicitation to buy or provision of any insurance product outside Hong Kong. Prudential and Standard Chartered do not offer or sell any insurance product in any jurisdictions outside Hong Kong in which such offering or sale of the insurance product is illegal under the laws of such jurisdictions.

Whether to apply for insurance coverage and Premium Financing is your own individual decision. If there is any inconsistency or conflict between the English and the Chinese versions, the English version shall prevail.

To borrow or not to borrow? Borrow only if you can repay!