BORROWER INSURANCE 2022. Since June 1, 2022, you now have the possibility to stop your home loan insurance contract at any time.
[Mis à jour le 2 juin 2022 à 14h56] Expected for months, even years by some, the termination of borrower insurance at any time came into force this Wednesday, June 1, 2022! A small revolution in the world of real estate loan insurance, a sector owned by more than 88% by banking institutions. Now, you are free to play the competition to get a more attractive rate at any time of the year. No need to wait for the anniversary date of the contract. You are free to make your choice.
Mais cette année 2022 reserves a second great new reference to the insurance of the borrower, to the suppression of the medical questionnaire. This measure refers to prices below € 200,000 and expired before the 60th anniversary of the insured. A novelty that takes effect on June 1 for new contracts will have to return to September 1 for current contracts. Be aware that recourse to a borrower insurance contract may be required through your bank when you want to make a real estate contract. This contract allows you to take over partial or total reimbursement of your loan monthly payments when you are temporarily incapacitated for work, permanently disabled, in total and irreversible loss of autonomy, or in the event of death. Not obligatory from a legal point of view, it is systematically required by your financial institution in order to open in case of default on your part.
Individual or group insurance contract for real estate loans, the insurance of a contractor allows to guarantee the reimbursement of a price. This assurance is a safety for the people to be taken, as for the prepared body, especially for the banks. L’assurance borrower takes care of the payment of all or part of the remaining credit repayment due due when you are in certain situations such as permanent disability, loss of your job or even death.
Borrower insurance is a security for both parties: it covers the insured (in whole or in part) in case of difficulties in paying the monthly payments of the loan, on the other it protects the financial institution which will be compensated in case of default of the insured.
Parliament adopted on Thursday, February 17, 2022 the termination of borrower insurance at any time. In other words, a borrower can now react to a real estate loan agreement at any time, when he was obliged to attend the anniversary date to others. The objective? Establish more important competition to reduce costs in favor of consumers. At the date of entry into force of this resistance at all times of the insurance, the borrower is known to them June 1, 2022 for the new contractson September 1 for ongoing contracts.
It does not end there, insurers have now, with this reform, the obligation to strengthen the information to respect the borrowers regarding their right to terminate before the anniversary date of their contract. In addition, all grounds for refusal will now have to be explanations et communicated to borrowers, as soon as a termination is refused. A big hard coup, especially for the banking institutions that own it 88% of this juicy market. In the future, banks will have to share the cake.
The medical questionnaire was a central issue in the lively debates between MPs and senators. Now the medical questionnaire will be deleted for loans of less than 200,000 eurosup to 400,000 euros for a couple. Please note that this new measure does not apply only and only, l’écheance du prêt is provided before them 60 years old of the insured.
This new measure represents a non-negligible progression for all patients suffering from pathologies cancer, mentally egg respiratory, among others. Prior to the reform, these borrowers were required to declare their illness, which forced a significant increase in their insurance value. It is now ancient history with this deletion of the medical questionnaire, which would affect more than half of the borrowers.
Want to know usability based on interest rates? Meet on the public service website to find out about your potential home loan potential, your contractor’s insurance value, credit term, and desired monthly payments. You can find the form right here.
The rate of borrower insurance varies greatly from contract to contract, depending on the amount borrowed, the duration of the contract, but also the age and health of the borrower. The annual effective rate of insurance (TAEA) is the cost of borrowing insurance, as a percentage of the total amount of the real estate loan. For example, a 0.5% fee represents an annual contribution cost of 0.5% of borrowed capital (and not remaining capital to be repaid).
Here is an estimate of the home loan insurance rates applied based on the profile of the borrower, according to the Borrower broker:
|Borrower profile||Real estate loan insurance rate|
|20 years non-smoker||0.05%|
|20 years smoker||0.08%|
|30 years non-smoker||0.09%|
|30 year old smoker||0.13%|
|40 years non-smoker||0.17%|
|40 years old smoker||0.25%|
|50 years non-smoker||0.31%|
|50 years old smoker||0.33%|
During the first year of the contract, the consumer can change insurance at any time (no later than 15 days before the end of the 12 months). After the first year, he must attend the expiration date of the contract. He can then change insurance at any time. In fact, the termination at any time of the borrower’s insurance is the entry into force of January 17, 2022.
Unlike car insurance or home insurance, home loan insurance is not it’s obligatory. But in fact, it is always required by the lender to grant you a real estate loan. If you want to get rid of this assurance, you can put your guarantee well, especially generally accepted for those who have a high wealth.
Where the insurance is optional, depending on the amount borrowed and the repayment period, the contractor may have an interest in the underwriter in order to be able to reimburse his monthly payments in the event oflife accident.
You have finished treatment against a cancer you face thehepatitis C and you are in forgiveness ? Double good news, the reduce the right to be forgotten has also been adopted! We will only have to wait for that 5 years after your remission so you no longer have to report it to your insurer. Previously, this deadline was 10 years. It is therefore split in two as part of the borrower insurance reform. The period during which additional costs can be charged to the insured is therefore much shorter, which should allow the insured to make savings.
Borrower insurance mainly covers three types of risks: the risk of death, the risk of disability and the risk of loss of employment. In case of death of the insured, the insurer reimburses the remaining capital to the financial institution. The warranty invalidity “It can lead to functional disability, inability to work or a total and irreversible loss of autonomy,” says the French Insurance Federation. In this case, the insurer reimburses all or part of the remaining capital according to the contract entered into by the insured. There is also a guarantee against the loss of a job. Depending on your contract, the insurer will reimburse to the financial institution all or part of the remaining capital.
The bank with which you take out a loan generally offers you a borrower insurance policy. If signing a contract is convenient, it is not necessarily the best financial solution.
Another solution is to choose a contract with an insurer. This is called the insurance delegation. By that means, it is possible to get a more interesting contract. Important detail, if you choose this path the contract “presented [à l’établissement de crédit] must present a level of guarantee equivalent to the insurance contract proposed by the credit institution “, recalls the French Insurance Federation.
Support the advancement of your price file, the credit institution will generally send you a standardized information sheet (FSI). “This sheet includes the insurance guarantees required by the credit institution for the granting of a loan, as well as a quantified example of the cost of insurance,” explains the French Insurance Federation. This standard sheet precedes the delivery of a personalized card in connection with your credit file.
The personalized file is essential and you have chosen another insurer that is offered by the establishment. It allows you to compare offers and make sure that the level of insurance is similar between the contract and the one proposed by the financial institution. Once the borrower’s insurance is taken out, you will need to hand over the insurer’s file to the lending institution so that the lender can validate the contract.