everything you need to know before making your choice

Borrower insurance: everything you need to know before making your choice

It is necessary to take out a borrower’s insurance contract for the establishment of a mortgage. This insurance allows the insured to protect himself against the risk of loan repayment default and to be covered in the event of a claim.

The guarantees offered by mortgage loan insurance

To choose a credit insurance contract in an informed manner, it should be remembered that it takes over from the reimbursements of the insured. In the event of death, the insurance therefore covers the capital remaining due according to the contract terms. For a loan taken out by several people, the insurance will cover reimbursement according to the insured portion. The total must add up to at least 100%.

For example, in the case of a couple, the spouses can choose to insure one of the two borrowers at 50% and the other also at 50%. But it is also quite possible to choose to insure the first borrower at 30% and the other at 70%. As it is also possible to cover both borrowers at 100% each.

However, borrower insurance goes further than death insurance. It actually offers additional guarantees which provide better coverage. In addition to the death guarantee, a mortgage insurance must include a total and irreversible loss of autonomy guarantee (PTIA) so that the banking establishment can agree to finance you.

Additional borrower insurance guarantees

In addition, it is also possible to take out other guarantees. The loan insurance contract can indeed cover the risks partial or total permanent disability (IPP or IPT) or total temporary incapacity for work (ITT). Some insurance companies also offer job loss coverage. To activate the guarantees and trigger the corresponding coverage, the calculation of the degree of disability remains decisive.

Please note that the disability rate calculated by the insurer is not the same as that calculated by health insurance. Indeed, they depend on a different procedure and scale even if the denomination is identical.

As part of the borrower insurance, the assessment of the degree of disability is carried out by the insurer’s medical advisor after analysis of the medical file. Depending on the state of health of the borrower and the consequences on his ability to work, the doctor establishes the degree of disability. If necessary, additional examinations may be required. In the event of disagreement with the rate fixed by the doctor, the insured person may request a second opinion.

Choosing the best loan insurance

Before taking out home loan insurance, it is essential to check the terms of coverage and the exclusions of guarantee in addition to the home loan insurance rate or TAEA (annual effective rate of insurance).

Depending on the borrower profile, it may be more interesting to choose the group insurance offered by the bank. In fact, this one pools risks and offers effective guarantees. On the other hand, for more specific situations such as the practice of professions and sports at risk, turning to an independent loan insurance contract offered by delegation may be more advantageous.

The Lemoine law, in force since 1er for new contracts, and effective on 1er September for seniors, allows you to change borrower insurance at any time. No need to wait for a specific date to be able to opt for another loan insurance. The only condition, however, is that the new contract must present at least the same guarantees as those offered in the group contract.

Not all companies offer the same guarantees or the same rates. To be sure to take out the best insurance, it is necessary to play the competition. Calling on a mortgage broker makes it possible to obtain a high-performance contract adapted to the borrower profile and the type of project.

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