Death, loss of autonomy, incapacity… Several types of guarantees offered by borrower insurance make it possible to protect people who have taken out credit. When it comes to a home loan, taking out insurance is, from a legal point of view, optional. However, in reality, banks require in almost all cases that such insurance be taken out.
A level of coverage in the event of death which depends on the insured portion
The repayment of a property loan takes place over many years, and large sums of money are at stake. However, an unfortunate event can occur, and banks therefore almost automatically require borrowers to take out insurance. for their loan. Indeed, in the absence of a death guarantee, which is the basic foundation of all borrower insurance, it is up to the surviving co-borrower or the heirs to continue to repay the entire loan in the event of death.
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Thanks to the death guarantee of a borrower insurance contract, all or part of the outstanding capital is reimbursed by the insurance company to the bank. The best protection is therefore 200% coverage, in which each co-borrower is 100% insured. In the event of the death of one of them, the entire property loan is reimbursed, as Maël Bernier, spokesperson for the broker Meilleurtaux, explains: “If the borrower is 100% insured, all the capital is reimbursed directly, this is incredible coverage”. He will therefore no longer have to pay monthly credit payments, and, if it is a rental investmentwill be able to fully collect the rents.
Another option: opt for partial coverage to save money. This time it may involve insuring each borrower up to 50% of the amount of the property loan. It is also possible to choose another reparation, for example up to 60% and 40%, or 70% and 30%, in the event of a significant income gap between the members of the couple. “The surviving spouse will remain responsible for the share for which the deceased insured person was not covered” summarizes Cécile Roquelaure, spokesperson for the broker Empruntis.
These 3 situations which prevent any coverage of your borrower insurance
There are certain situations in which the insurance company may refuse to reimburse the outstanding capital upon the death of a borrower. This type of contract therefore does not offer infallible protection, and it is important to know these specific cases in order to avoid finding yourself in a difficult situation. This is particularly the case when the borrower commits suicide during their first year of insurance. Coverage is excluded, with the exception of property loans taken out for the purchase of the household’s main residence, for which a minimum of €120,000 in compensation must be provided by the insurance company.
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Secondly, risky behaviors and practices can also be excluded. These generally concern accidents caused by the insured while taking narcotics, medications in non-prescribed doses or even alcohol at a rate higher than the legal rate. Accidents occurring while practicing extreme sports can also be excluded. “Every detail counts, you really need to take the time to read and understand your contract, even if it means getting help” analyzes the Empruntis spokesperson.
Finally, false declarations made when taking out the borrower insurance contract can justify a refusal of coverage. Article L113-8 of the Insurance Code thus provides for the nullity of the contract in question. “if it appears that the insured has provided deliberately misleading answers to specific questions”. For example, saying that you are a non-smoker when you smoke can justify a refusal of compensation.
2023-12-28 06:33:14
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