Loan insurance, also known as credit insurance or borrower insurance, guarantees the recovery of the maturities of a mortgage. It is also a protection for the borrower in case of loss of income due to an accident in life: death, total or partial permanent disability, temporary and total incapacity for work, loss of employment …
Credit insurance in this case avoids the sale of the property. What is its cost and what does it cover?
Credit insurance increases the cost of the loan because it is calculated over the total duration of the loan. It is added to the interests in proportion of 25 to 40% according to the insurers. When offered by the bank, guarantees and rates are standard, regardless of the borrower’s profile.
The borrower has the opportunity to freely choose his credit insurance. Nevertheless, the bank has the right to refuse the insurance delegation if it considers that the guarantees subscribed do not offer him sufficient security.
To avoid any subjective decision, the subscriber of the loan contract has the possibility to consult the list of criteria retained by the Financial Sector Advisory Committee before presenting the guarantees subscribed at another insurer.
Our advice: prices being free, it is necessary to compare the contracts offered by different insurers based on cost, but also the proposed guarantees, exclusions provided, the deductible, the waiting period, the ceiling of guarantee and the type of compensation.
Buying an individual insurance is cheaper, even if prices vary from simple to triple:
Among the different guarantees of the loan insurance, 4 are mandatory:
With the borrower insurance, we must be attentive to the chosen portion, that is to say, what will be your responsibility in case of disaster.
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