Borrower insurance, the various guarantees
First, remember the 3 types of guarantees a borrower can subscribe:
- There is a mandatory guarantee in case of Death (DC) / Total and Irreversible Loss of Autonomy (PTIA). In this case, the insurance companies assume the reimbursement of the outstanding capital in case of death or total and irreversible loss of autonomy of the insured.
- There are then optional guarantees but very strongly recommended: Total Permanent Disability (IPT), Partial Permanent Disability (IPP), Total Working Disability (ITT) and Partial Work Incapacity (ITP) guarantees that cover your monthly payments. loss of income due to a work stoppage or disability. So if you are active, it is better to subscribe to this coverage, however if you already have guaranteed income (retirees or annuitants), the death guarantee can suffice.
- Finally, there is also a job loss insurance that covers your income losses in case of unemployment. Note that the latter is also optional and not required by banks.
In the case of these 3 guarantees, what do you see that credit insurance is better than another? The best price is not everything, we must also take the time to look at the terms of compensation, the proposed guarantees and all other terms and conditions of sale.
Check how you will be compensated: indemnity or lump sum?
For the Incapacity and Invalidity guarantees, there are two compensation principles:
- Income maintenance (indemnity guarantee): your contract will only compensate the difference between the daily allowances paid by your social organization and your usual salary.
- The flat-rate guarantee: repayment of the entire maturity (or in part depending on the percentage of coverage chosen) even if your remuneration is maintained.
The flat rate guarantee is the safest way for you and your bank.
Check the definition of your disability benefit
In certain contracts, compensation occurs in the event of incapacity to exercise one’s profession.
Other contracts compensate according to the impossibility of exercising any profession. In this case, the possibilities of reclassification are taken into account: this definition therefore reduces your level of protection.
Check the reliability of the contract over time
The total irrevocability of the guarantees: whatever the evolution of your personal and professional situation (change of profession, departure abroad …) you remain covered under the same conditions.
Maintaining the rate for the duration of the loan.
Check the grace periods of the guarantees Incapacity of Work
For Total Permanent Disability (IPT) and Total Temporary Disability (ITT) guarantees, there are deductible periods during which you will not be compensated: generally it is 90 days but some companies propose to reduce it to 30 days (interesting in the case of non-salaried workers), or to increase it to 180 days (interesting for employees who have good pension coverage).
Check the duration of the indemnification and the duration of coverage of the guarantees
Again, we must remember to check them and especially for the guarantee work stoppage. Most insurance contracts pay up to 3 years but pay attention to contracts that will compensate you for a shorter time. Beyond this period of coverage by the insurance for incapacity for work, and if the company’s medical adviser declares you unfit to resume work, it is the disability benefit that will take over.
Another point to look at also carefully is whether you will be well covered until the end of your loan. Indeed, some guarantees stop at a certain age.
In the majority of contracts, the age limit for membership is 65 and the age limit for termination of benefits is 75. However, there are specific contracts for seniors that can cover up to 85 years of age of underwriting and 90 years of age of end of guarantees. As a retired senior, you will only have access to the death guarantee.
We must therefore focus on contracts that will cover all your guarantees for as long as possible.
Check the contribution calculation base
These can be calculated according to the capital remaining to be refunded: in this case, you realize real savings because you do not pay insurance for the principal already refunded! The contribution is degressive according to the capital remaining due.
Other contracts provide instead a calculation on the initial capital, which on the entire loan may penalize you. You still pay the same contribution and yet the risk of the bank decreases along with the remaining capital. However, in some cases where borrowers are old or if there are bridge loans or delayed repayments, these contracts may be advantageous. It really depends on all the features of your loan and your profile, we can not do general! Consult us, we will indicate you the best type of contract to remember in your specific case.
Look good if the price is guaranteed
Indeed, some contracts do not guarantee their tariff, that is to say that apart from increases related to age, government tax reforms and various changes in circumstances that may lead to a change in tariff, some companies reserve the right to index their rates at any time and therefore not to guarantee the basic rate to which the borrower had access when subscribing. You must therefore pay particular attention to this point in the terms and conditions of the contract to which you are about to subscribe.
Exemption from contributions in the event of an accident
Some companies suggest that you no longer pay premiums for compensation, some after 90 days, others after 30 days, or some not at all.
The best option, of course, is to choose a loan insurance policy that offers a 30-day exemption.
Pay attention to medical formalities
The price is not everything. Indeed, you can find a contract with a better price than another for equivalent guarantees but which may require much more medical formalities than the more expensive contract. In some cases some medical formalities can be cumbersome and time consuming. In the event that a borrower needs to finalize his subscription quickly because of the signing deadline at the notary are at stake, it will be better to privilege a contract a little more expensive but for which you will get your certificate of adhesion more quickly. You can still use the Hamon law, or the Bourquin law to terminate this contract and change it.
Mentioned in the general conditions of sale, it is necessary to take the time to read the exclusions, even if it may seem sometimes long and boring.
Indeed, in addition to the so-called “general” exclusions (related to the risks of suicide, war, …), one must be aware of other limitations of guarantees.
Thus, sports can be covered at the same rate or with personalized pricing if you are a member of a club, a federation or compete.
In many contracts, you may notice limitations or exclusions for disco-vertebral conditions (ie, “back pain”) or neuropsychic diseases (ie, nervous breakdowns). Attention to this point which concerns a very big part of the work stoppages, think to subscribe the option repurchase exclusions dos and psy in the guarantees IPT / ITT.
Check the territoriality of your guarantees
If you travel a lot for work or if you live abroad, while having a credit for a property located in France, it is necessary to favor a contract which covers you all over the world, and which does not limit the duration of trips to 45 days a year, as in many contracts.
Choose your lot
Thus, for optimal security, choose a 100% coverage rate for each person protected by the contract: if something happened to you, the remaining principal of your loan would be fully reimbursed to your bank. Thus, the support of your credit would not be your heirs!