Comparing Home Loan Insurance Policies: How to Find the Best Deal

Home loan insurance guarantees that monthly loan payments will be paid back in certain cases where the borrower is unable to honor them. Conditions of support are applied to each guarantee.

Real Estate Loan Insurance Comparison! Free and without commitment!

Among these conditions, there is a grace period in which compensation cannot be granted.

Why take out property loan insurance?

Taking out loan insurance is not a legal obligation. However, it is almost routinely forced by credit agencies to grant the loan. It provides insurance for the repayment of the loan in case of failure to honor the monthly payments by the borrower within the framework of the guarantees included in the contract , which covers the risk taken for the debtor. There are two mandatory guarantees on a real estate loan insurance contract:

• The death
  natural death or as a result of accident or illness. Death occurring after a voluntary risk is generally excluded from coverage, as is suicide by the insured during the first year of coverage.
• Total and irreversible loss of independence (PTIA) with a disability rate assessed at 100%, definitively preventing the insured person from doing any paid activity and forcing them to resort to assistance for daily activities.

Three other optional warranties may be issued in the contract:

• Total or partial permanent disability (IPT/IPP) : the disability rate is set at 60% and above for the IPT, and between 30% and 60% for the IPP. Permanent disability prevents any exercise of paid activity by the insured person.
• Temporary total incapacity for work (ITT) : the insured is on sick leave. He is unable to perform his professional activity but the inability is only temporary.
• Lose a job : is generally subject to a longer grace period. Compensation is specifically regulated. The insured must show that he or she is actively looking for work.

What are the standard coverage conditions for home loan insurance?

Coverage terms may vary from one insurance contract to another. This is how competitiveness can be translated.

• The waiting time : this is the period in which the insurer pays his insurance contribution, but the guarantees are not yet implemented. Its duration can be between one month and one year. The period chosen could affect the insurance rate up or down.
• The licensing period : the waiting period has passed, the promises are received, but there is a delay between the date of publication of the application and the date of commencement of the compensation. The average exemption periods are estimated between 3 and 6 months for death guarantee and ITT, between 1 and 3 months for IPT or IPP, and between 3 and 9 months for loss of employment. These estimates are still indicative.
• Reimbursement limits : applied to all guarantees, their amount must be as high as possible for the contract to be competitive.
• Exclusion of warranty : this applies, for example, to the consequences of acts of war, voluntary risk or suicide of the insured in the first year of the contract. Restrictions on certain guarantees may also apply to the contract, and the list may grow according to the risk that the insurer considers.
• The degree of invalidity and impotence : the percentages reserved for IPT, IPP or ITT coverage are a measure of competitiveness.

Can loan insurance exclude franchise period?

If the situation is still rather special, a loan insurance offer can perfectly put out the licensing period. The insurer must, however, be careful about the other terms of the contract. Lack of franchise period is usually the way to make an offer attractive. The insurer believes that it will benefit from much more attractive guarantees. Certainly, the presentation is not false, but we should not forget that insurance tries to reduce the risk.

Also, the lack of licensing period can hide extended waiting periods, higher contribution, lack of optional guarantees and thus exclude loan coverage in the event of an accident or loss of employment, or even exclusion guarantees that have the a much longer list than another contract. . It is better not to rush your choice and examine the offer in detail to try to find out the reasons for this lack of licensing time.

Does it make sense to focus on borrower insurance offers without a deductible?

If it is possible to get an insurance contract without a deductible period, is it very interesting? Based on the idea that the lack of licensing time necessarily leads to a reduction in other guarantees in the contract, the answer is no. By choosing to reduce other guarantees in the contract, such as more warranty exclusions, a lower quota, or even a pledged corporate guarantor, that reduces the interest of the borrower’s insurance.

A real estate loan guarantees the borrower for 15 to 25 years. The monthly loan payments are generally the largest in the overall household budget. It is impossible to protect yourself against the emotions of life that can quickly wake up everyday life. The commitment is far too important to reduce the need to take out a mortgage insurance contract with the best protection.

How to get the most competitive home loan insurance deal possible?

It is very wise to negotiate licensing dates. Some insurance agencies set deadlines of up to 180 days, which completely calls into question the benefit of insurance coverage. The insurer’s real need is to be able to cover their monthly payments in the event of a major event.

In reality, we will say more broadly that insurance contracts must be as lenient as possible. A gesture on one side should not lead to dire consequences on the other. That is why it is better to focus on the overall competitiveness of the contract by presenting a qualitative file to the insurer:

• A steady state : it is better to come with an indefinite employment contract. Ideally, the insurer will have a certain level of status within the same company that demonstrates the stability, reliability and good health of the company.
• Good salary : if the rest of your life is estimated to be higher than the minimum, the insurer will be more lenient in increasing the level of coverage or reducing the conditions for implementing the commitments. The best thing is to be able to keep saving. This is a good sign for the insurer.
• Financial contribution : if the borrower manages to make a capital contribution with his property loan, the insurer will be much more likely to negotiate the insurance terms. This is proof that the borrower has given anticipation and maturity to his project that fits perfectly with his ability to repay.
• Unpredictable financial management : overdrafts are prohibited in the months before the loan request.

Compare online to avoid marketing offer problems

Access to property ownership is still a dream shared by many French people, which unfortunately has gone much further for some with the rates that have increased significantly since 2021. to reduce the risk of insurers. Some of them apply less attractive conditions, but nevertheless present very attractive marketing offers. To avoid the first time buyer trap, it is best to use online comparisons.

Online comparison identify the elements necessary to calculate the annual loan insurance contributions (including the amount and duration of the loan, the age of the borrower, the amount of the personal contribution, etc.). They will be able to display updated offers from insurers based on the profile of the borrower. The interest rate is clearly displayed on each offer. The lender can then adjust the pledges to assess their impact on the cost of the grants. Online comparator services are 100% free, reliable, instant and without financial or contractual guarantees.

The borrower can also turn to loan insurance broker. This expert knows how to block ads that are too tempting to be truly competitive. He also knows how to find offers with real potential and that perfectly match the borrower’s expectations.