All you need to know about loan insurance

All you need to know about loan insurance

What is loan insurance?

a loan insurancewhere Borrower insurancePartial or total coverage of loan maturity is allowed if one of the conditions stipulated in the contract is met. If such insurance is rarely mandatory for credits of small amounts (most consumer loans for example), then it is Requested by the majority of financial institutions in the context of mortgage. Several events can trigger this lockout:

  • death danger
  • Risk of complete and irreparable loss of autonomy (PTIA)
  • Risk of permanent total or partial disability
  • Temporary incapacity for work
  • Risk of losing a job

The Special conditions The start of your loan insurance is determined by your financial institution. You can also choose different forms of coverage. For example, if you borrow to buy or renovate your main residence with your spouse, Take advantage of the death condition It can take many forms

  • Pay off 50% of the loan in the event of the death of a borrower
  • 100% repayment of the loan in the event of the death of a borrower

Each option is selected, and depending on the file coverage level Desirable, be aware that the cost of this insurance will rise. So you have to make your decision wisely.

How do you reduce the cost of securing a loan?

As we’ve seen, loan insurance can be an important part of your investment. In order to save money, here are some ideas:

  • You can save by changing the loan insurance: several laws have defined subscription conditions or change loan security (Lagarde, Hamon, and Burken laws). So you can choose a partner other than the one offered by your bank, or terminate your contract to take advantage of it More Attractive Prices or favorable conditions
  • you can Negotiate the terms of your loan insurance Like the rate at which you borrow, it is possible to negotiate loan security. Most contracts, then Minimum guaranteesDesigned to fit the largest number. It is therefore possible that you may pay for services that do not interest you or, on the contrary, that your coverage is not suitable for certain specific risks.
  • you can negotiate regularly : is a reaction when borrowing for periods of more than 10 years. Markets change and many factors may justify reviewing the terms of your loan insurance contract: a professional change, a general reduction in insurance rates, a rate cut or even deflation.

Finally, a to examine You may be asked. So prepare for it so you don’t risk an extra premium, especially by eating a balanced diet and quitting smoking.

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