Group or Individual Borrower Insurance: Comparison

Group borrower insurance is the collective contract offered by the lending bank, while individual insurance is a contract taken out with an external insurer by delegation. In 2026, for a 600,000 euro mortgage in Paris, the individual contract costs on average 40 to 60% less than the group contract, representing savings of 12,000 to 25,000 euros over the life of the loan.

Introduction

When you borrow to buy an apartment in Paris, the question of mortgage insurance arises at the end of the process, often in the rush of signing. The bank offers you its group contract: simple, quick, integrated into the loan offer. The alternative, delegated insurance with an individual insurer, requires additional effort but generates significant savings.

This guide objectively compares the two options with worked examples corresponding to the Parisian market in 2026, where the amounts borrowed, 500,000 to 1,500,000 euros, mechanically amplify the cost differences between the two formulas.

Table of Contents

• Group contract: how it works and its limits
• Individual contract: principle and advantages
• Detailed comparison on a Parisian case
• Guarantee equivalence criteria
• How to switch from a group to an individual contract
• What our property hunters recommend

Group contract: how it works and its limits

The group contract is a collective insurance policy negotiated by the bank with a partner insurer. All the bank’s borrowers are covered by the same contract, with standardised guarantees and a pooled rate.

The calculation method is the most important characteristic. The group contract calculates the contribution on the initial capital borrowed. If you borrow 600,000 euros at an insurance rate of 0.34%, your monthly contribution is 170 euros, and it remains at 170 euros throughout the entire loan term, even when your outstanding capital is only 200,000 euros in 15 years’ time.

The guarantees are uniform and do not adapt to your profile. A non-smoking 30-year-old in excellent health pays the same rate as a 45-year-old smoker with medical history. This is the pooling principle: good profiles subsidise higher-risk profiles.

Exclusions are often broader than in individual contracts. Risky sports, certain back conditions, and psychological conditions may be excluded or limited in group contracts.

The main advantage remains administrative simplicity. The contract is integrated into the loan offer, requires no additional steps, and reassures the bank about the adequacy of the guarantees.

Individual contract

The individual contract is taken out with a specialist insurer (Cardif, Generali, April, etc.) through an insurance broker or directly online. It offers personalised guarantees and a rate calculated on the outstanding capital.

The calculation on outstanding capital means your contributions decrease over time, in parallel with the amortisation of your loan. At the start of the loan, the contribution may be close to that of the group contract, but it falls each year. Over the total duration, the savings are substantial.

Individual pricing takes into account your age, health status, profession, and lifestyle. A favourable profile, under 40, non-smoker, executive, no medical history, obtains very competitive rates, sometimes 3 to 4 times lower than the group contract rate.

The guarantees can be adjusted to your situation. A self-employed worker can strengthen the temporary total incapacity guarantee. An investor can limit cover to death and total permanent disability for a buy-to-let investment, reducing the premium by 30 to 40%.

Detailed comparison

Consider a concrete example corresponding to a typical purchase in the 9th arrondissement of Paris.

The profile: a couple aged 36 and 38, executives, non-smokers, no medical history. The loan is 600,000 euros over 20 years at a rate of 3.2%. The cover level is 100% on each borrower.

With the bank’s group contract at a TAEA of 0.36%, the fixed monthly contribution is 180 euros per borrower, or 360 euros per month for the couple. The total cost over 20 years reaches 86,400 euros.

With a delegated individual contract, the average TAEA is 0.14% calculated on outstanding capital. The contribution starts at approximately 140 euros per month for the couple and decreases progressively. The total cost over 20 years is approximately 42,000 euros.

The saving achieved is 44,400 euros over the life of the loan, or 2,220 euros per year. For an 800,000 euro loan in the 16th arrondissement, this saving exceeds 55,000 euros.

Even for a less favourable profile, a 48-year-old former smoker, the saving with an individual contract generally remains 15 to 25% compared to the group contract, because individual pricing is still finer than pooling.

Guarantee equivalence criteria

The bank can only refuse your delegated insurance if the individual contract does not cover the same guarantees as its group contract. The equivalence criteria are defined by the CCSF and cover 18 points across 4 categories.

The death and total permanent disability guarantees must cover the same scope: exclusions, caps, and trigger conditions must be at least equivalent.

The temporary total incapacity guarantee must provide comparable compensation in terms of waiting period (generally 90 days), compensation method (fixed or indemnity-based), and maximum duration.

The partial/total permanent disability guarantee must cover the same trigger threshold (generally 33% disability for partial, 66% for total).

In practice, most individual contracts meet these equivalence criteria. Your insurance broker prepares a guarantee-by-guarantee comparison table to secure the substitution.

How to switch

The Lemoine law simplifies the switching process. You can cancel your group contract and replace it with an individual contract at any time, at no cost.

The first step is to obtain your personalised guarantee sheet from your bank, which details the required equivalence criteria.

The second step is to take out an individual contract with the insurer of your choice. The health questionnaire is waived if the insured portion does not exceed 200,000 euros per borrower and the loan ends before your 60th birthday.

The third step is to send the substitution request to your bank, accompanied by the new contract and the guarantee equivalence table. The bank has 10 working days to accept or justify a refusal.

The new contract takes effect on the cancellation date of the old contract. There must be no gap in cover. The loan amendment reflecting the insurance change cannot incur any bank fees.

What our hunters recommend

At Home Select, we incorporate borrower insurance optimisation into our support. Our recommendation is systematic: shop around, even if your bank offers an attractive interest rate. A low nominal rate does not offset expensive group insurance. It is the total cost of the loan that matters.

For our clients purchasing in Paris’s most expensive arrondissements, 6th, 7th, 8th, with loans exceeding 1 million euros, savings on insurance can reach 40,000 to 60,000 euros. That is an amount that changes the equation in the overall budget.

We direct our clients to specialist insurance brokers who understand the requirements of Parisian banks and accelerate the delegation process to avoid delaying the signing.

FAQ

Can the bank refuse individual insurance?

The bank can only refuse a delegated insurance if the individual contract does not offer guarantees equivalent to its group contract. This refusal must be justified in writing within 10 working days. It cannot refuse for commercial reasons.

When is the best time to switch from group to individual insurance?

The best time is within the first two years of the loan, when the outstanding capital is highest. Thanks to the Lemoine law, you can switch at any time. Savings are maximised early in the loan because contributions are based on a higher capital amount.

Does individual insurance cover as well as group insurance?

Yes, often better. Individual contracts generally offer more personalised guarantees and more favourable compensation terms (shorter waiting period, broader coverage). The CCSF equivalence criteria guarantee a minimum level of protection.

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Buying in Paris and want to optimise your borrower insurance? Our property hunters connect you with specialist brokers to maximise your savings. Contact us for comprehensive support.