Everything you need to know about loan insurance
Everything you need to know about loan insurance
85% of loan insurance contracts are taken out via lending organizations
When you want to borrow as part of a real estate purchase, insurance will be required by the lender. The latter protects you against the risks of life. The guarantees offered are as follows: Death (DC), Total and Irreversible Loss of Autonomy (PTIA), Total Temporary Incapacity for Work (ITT), Partial Permanent Disability (IPP), Total Permanent Disability (IPT), Job Loss Insurance (APE) If one of these events occurs, the insurance taken out allows you to reimburse your bank all or part of the capital remaining due. Generally presented as more advantageous, group insurance (offered by the bank) is subscribed by nearly 85% of French people due to a lack of knowledge. This loan insurance is far from being the most advantageous because its cost is almost twice as high as individual insurance (offered by an organization other than the bank).
Savings of up to €6,425 thanks to the law
For several years, various laws have granted more freedom to borrowers:
The Lagarde law (2010)
This law allows you, in the context of a mortgage, to take out loan insurance with an organization different from your bank. Prior to this date, borrowers were required to take out loan insurance from the lender.
The Hamon Law (2014)
This law complements the Lagarde law and allows you to change your loan insurance during the first 12 months after signing the contract. Indeed, when you take out loan insurance with any organization, you have the option of changing it during the first year.
The Bourquin Amendment (2018)
In force since March 1, 2017, this amendment allows you, if your loan was taken out after this date, to change your loan insurance annually, on each anniversary date. If your loan is older, then this law will be applicable as of January 1, 2018. This new system is interesting but requires compliance with two months' notice. These three laws are applicable only if the guarantees of the new contract are equivalent to or greater than what the bank required at the start.Example: for a borrowed amount of €200,000 over 20 years, group insurance amounts to an average of €15,525, while individual insurance amounts to €9,100. The savings achieved thanks to these laws therefore amount to €6,425.
Sources:http://www.baofrance.com/telechargement/Etude2017/2017%2002%2008%20Etude%20BAO%20Tarifs%20bancaires%202017.pdfhttp://bonne-assurance.com
