When you take out a loan, the bank requires you to take out insurance to cover health risks. Even if it is primarily an obligation of the lender, know that the French legislation protects the borrower and allows him to freely choose his contract.
Group or delegation?
The group contract
The risks are shared, the insured paying the same rate regardless of their age. The formula is rather interesting for people over 45 years old. For the others the rates must be compared with an external delegation, whose principle is based on an individual pricing .
The group contract has 2 advantages for us, apart from the tariff aspect:
- Guarantees are generally very good, which seems logical since beyond the protection given to the insured, the banks seek to guarantee themselves.
- Then, the health questionnaire is often simplified and the management of the file much faster than in delegation.
Think about it if you have to mount your file in an emergency.
Delegation of insurance
The bank can not impose your contract. You have the choice of the insurer provided that the guarantees offered are not lower than the group contract.
Be aware, however, that in practice things are not so simple. Indeed, while most banks play the game and quite easily accept an external delegation, some are still trying to impose their own contract, despite the fact that the “double sale” is strictly prohibited in France.
In fact, if the law imposes free competition, nothing prevents the lender to offer you a competitive interest rate. In other words, you could ultimately get a less attractive proposition if you buy your loan insurance contract outside the bank.
Equivalence of guarantees in case of delegation
If the bank accepts that as you delegate credit insurance to a company of your choice, you will have to provide guarantees at least equivalent to those of the group contract.
Avoid a purely tariff approach and take care to compare the guarantees in detail with each other. Loan insurance comparators are teeming with the Internet and subscribing online is certainly very convenient, but the consequences of a bad choice can be dramatic.
This is why the tariff should not be the only criterion of analysis. It is imperative to read the general conditions of the contract before signing. This sounds obvious, but many insureds do not. Pay special attention to the chapter on exclusions .
Difference between ITT and IPT
- The bank requires that you be guaranteed for the following risks:
- DeathTotal and irreversible loss of autonomy ( PTIA )
- Permanent invalidity: total (ITT) or partial ( ITP )
- Temporary incapacity for work ( ITT )
The unemployment benefit is an optional option that you choose to take or not according to your professional situation. All the borrower insurance policies include the above guarantees. Are they equivalent? Certainly not. We will take one example only for you to understand that it is important to read carefully all the clauses of the contract.
Total permanent disability is equivalent to the 2nd category of social security and covers the borrower from a disability rate of 66% . It is paid as soon as the insured can no longer perform any activity giving entitlement to remuneration.
This guarantee insures you insufficiently because if, following an illness or an accident, you find yourself in such a situation, but after deciding social security declares you able to partially resume your activity, you will find yourself in a financial situation delicate. Indeed, the insurance contract will not work since you are able to resume an activity (even partial) and your professional income will be lower.
To cover fully and face the deadlines of the mortgage, it is necessary to cover in case of partial disability , it is from a disability rate 33% . That’s the difference between ITT and IPT guarantees.
If you are worried about losing your job, you have the possibility to cover yourself by taking out unemployment insurance that will cover all or part of the monthly payments of your loan.
However, be aware of the conditions of access and the limits of guarantee . Most contracts, for example, impose a waiting period. It is unlikely that you will find a contract that insures you the first twelve months.