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To provide a home loan, the bank requires the borrower to purchase disability death insurance. It is possible to choose another contract than the one proposed, often cheaper and more protective.

How to choose your insurance policy when you have a mortgage

What is the purpose of job loss insurance?

Thejob loss insurance comes into play for pay the monthly repayments instead of the unemployed borrower after a dismissal (except for gross negligence).
Such a guarantee subscribed before the June 27, 2008 does not play in case of conventional break (ministerial response, OJ of the National Assembly of 9 November 2011). After that date, everything depends on the terms of the contract.
Job loss insurance is often expensive and its restrictive implementation conditions. It intervenes only after a grace period for example 6 months of unemployment and for a limited time.

Is disability-death insurance mandatory?

The obligation to subscribe disability-death insurance does not result from the law but from the loan agreement. And without it, you will not get credit. Insurance brings to the bank the guaranteed to be refunded if you are unable to meet the monthly deadlines.
In the event of death or total and irreversible loss of autonomy, theinsurer will reimbursein your place, the remaining capital due to the credit institution.
In case of temporary incapacity for work, he will take care of a certain number of monthly payments. You can complete this coverage with a job loss insurance, always optional.

Inquire about competition before subscribing to an insurance contract

The bank from which you obtained the loan will offer you his insurance contract. This group contract is underwritten by the bank and its clients can join. But since the 1st September 2010, it can not be imposed on you anymore.
You can prefer him a individual contract. This possibility must also be indicated in the loan offer.
Do not automatically opt for the group contract. Solicit competition. You can have good surprises. For example, a group contract is often financially less favorable to borrowers under 40 years of age without special medical risks (eg non-smokers) than an individual contract.
However, do not stop at the single price criterion. It is essential to analyze the level of benefits. Be alert to the following questions:

  • At the end of how much sick time, does insurance come into play?
  • Are diseases excluded from the guarantee? Nervous diseases, low back pain are often.

Admittedly, the exercise is not easy. To help you you can refer to a panorama of guarantees offered by different insurers on the website baofrance.com.
The bank may refuse the chosen individual contract if it does not offer guarantees equivalent to its group contract. She must justify her refusal.

Health questionnaire

When you sign up for the contract, you will need to respond to a standard medical questionnaire.
If your answers suggest that you have a higher risk than the average, the insurer will submit a more detailed questionnaire. He may even ask you to carry out additional examinations (blood test for example). Bring precise and accurate answers. Hiding diseases puts you at risk of not being covered in case of problems.
If you have an aggravated risk (a chronic or long-term illness such as cancer, or diabetes...), you will not fall back on classic contracts but AERAS convention ("insure and borrow with aggravated health risk").

Change insurance during the loan

You can change your disability-death insurance policy in the 1era year following the signature of the loan offer. Proceed in stages:

  1. Solicit multiple competing insurers;
  2. Select the offer which, with equivalent guarantees, is the cheapest;
  3. Send it to your bank stating your desire to change your contract;
  4. The bank must notify you of its decision within 10 days;
  5. If she refuses, she must give the reason;
  6. If she agrees, inform her current insurer of the termination of the contract by registered letter with acknowledgment of receipt. This letter must be sent no later than 15 days before the end of the one year period to change insurance. Do not forget to attach the acceptance decision of the bank to his mail.


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