1. Borrower's insurance, a security for all
Borrower insurance can be used to insure against death, disability, work stoppage and/or job loss. When a guarantee is activated, the insurer shall repay the terms of the loan in whole or in part.
When you want to make a bank loan, it is necessary to purchase a borrower insurance to guarantee your loan.
It is a security for you and your family, and for the credit institution: in the event of death, disability, work stoppage or job loss, it is the insurance that covers all or part of the monthly payment of credit.
1.1 Choose your borrower insurance contract
A borrower insurance allows you to be insured in case of death, disability, job stoppage and/or loss of employment. When a guarantee is activated, the insurer reimburses the loan maturities in whole or in part.
You can join the insurance contract offered by your bank that has negotiated group insurance with an insurer.
You can also apply for an insurance delegation, and purchase an insurance contract from the insurer of your choice.
The contract must have a level of guarantee equivalent to the insurance contract offered by the credit institution.
If, after a detailed study of your file, the level of guarantee is not equivalent, the latter has the option of refusing the proposed insurance contract.
During the twelve months following the signing of your loan offer, thanks to the Hammon law, you can put a term to the underwritten borrower insurance.
To do so, you must submit a borrower insurance contract with an equivalent level of guarantee.
This request can be made at any time during the first twelve months of your loan. Any decision of refusal by the lender must be justified.
You may also terminate this insurance once a year if you submit to the credit institution a borrower insurance contract with an equivalent level of guarantee.
The cancellation request must be made two months before the end of the borrower insurance contract.
Any refusal by the lender must be justified.
For mortgage credits or consumer credits, in case of non-payment of insurance contributions, the insurer is obliged to inform the credit institution.
2. The "AERAS" Convention
You can also subscribe to the « AERAS » convention.
The « AERAS » Convention (Insuring and borrowing with an aggravated health risk) aims to insure people with or who have had a health problem.
The « AERAS » Convention aims to insure people with or who have had a health problem.
A « right to oblivion » and a reference grid complete the « AERAS » convention.
3. Co-borrowing and insurance
If you are multiple co-borrowers, you can :
– Either insure each of you for the whole of the capital. In this case, if one of the co-borrowers dies, the insurer will reimburse the entire principal outstanding.
– Either you insure each for a part of the capital. For example, if each of the co-borrowers is insured up to 50%, in case of death of one of them, the insurer will pay half of the outstanding capital.