How do I get a mortgage loan borrower insurance contract?
Verified 07 September 2022 - Directorate for Legal and Administrative Information (Prime Minister)
Before you make an offer for a mortgage, the bank may require you to obtain borrower insurance. The bank sets out the minimum guarantees (e.g. death, disability). It then estimates the cost of insuring your future credit. But you can go to another insurer. In all cases, you will have to complete a health questionnaire in order to obtain a proposal for an insurance contract.
Borrower insurance covers the payment of all or part of the repayment terms of the outstanding credit when you are in certain situations:
- Death and total and irreversible loss of autonomy
- Permanent disability (total or partial) and temporary incapacity for work (total or partial)
- Possibly loss of employment, because you are free to take this warranty or not
The bank you are applying for a mortgage from may require you to obtain borrower insurance.
In this case, you will need to apply for a borrower insurance contract.
The bank can offer you its borrower insurance contract or the insurance contract of one of its partners. This is called group insurance contract.
But you can choose to go to another insurer.
Once you have obtained the agreement of an insurer, the bank will agree to make you an offer of a loan.
The bank defines the characteristics of the insurance contract that it requires according to the type of loan requested (to buy your main residence, for a rental investment...) and your professional status (civil servant, employee, ...).
These are the following characteristics:
- Minimum guarantees (risk of death, risk of invalidity, ...)
- Content of each guarantee, i.e. the type of risk cover (risk covered until the end of the loan or until a certain age, etc.)
- Height at which the loan is to be insured (100% or part)
The bank then does a simulation of the mortgage credit and the insurance contract it could offer you.
She then gives you the following information:
- List of documents to provide to make your credit application
- Standardized factsheet. This sheet indicates the characteristics of your credit application and the minimum guarantees of the borrower insurance required. It also indicates the insurance contract that the bank could offer you and its approximate cost (taking into account the characteristics of the loan, your age, the guarantees envisaged ...).
- Custom form. It is this card that defines the characteristics of the insurance contract that you need to obtain. It shall contain the elements indicating the amount of the loan to be insured, the type and the content of the guarantees to be covered. These elements are defined using a maximum of 11 criteria for death, loss of autonomy, disability, incapacity and a maximum of 4 criteria for job loss.
The bank from which you are applying for your mortgage may offer you a borrower insurance contract that it offers or that one of its partners offers. This is a group insurance contract. We're talking about group insurance contract.
But you're free to go to another insurer.
In all cases, the insurance contract you choose must meet the criteria in the custom card that the bank gave you.
multiple items (time limit of deficiency, time limit of frankness ...) allow comparison of insurance contracts.
The rules differ depending on the characteristics of the loan:
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Loan up to €200,000 per insured and to be repaid before age 60
The insurer is prohibited from having you fill out a health questionnaire. He must also not have you undergo a health examination.
Before offering you a borrower insurance contract, the insurer asks you to complete a medical questionnaire. It assesses the risk based on your answers.
This questionnaire must be completed in good faith. Any intentional omission (intentional forgetfulness) or misrepresentation is prohibited. If the insurer detects deception when you ask them to refund your credit, they may refuse to compensate you or have your insurance contract terminated.
the insurer may ask you to perform a further medical examination.
In support of the questionnaire:
- If you have or have had any aggravated health risk due to illness or disability, your borrower insurance claim is automatically covered by the Aeras Convention.
- If this is not the case, the insurer makes you an insurance proposal indicating in particular the guarantees for which it grants coverage, the conditions to be fulfilled to trigger them, the exclusions, the amount of the monthly contribution over the total duration of the loan, the cost of the insurance, the waiting periods.
When the insurer offers you a borrower insurance contract, he must attach to the loan contract a notice listing the following points:
- Insurance-backed risks
- Insurance methods (conditions for obtaining repayment of the credit)
all the terms of the insurance contract must appear in the information notice.
You must also be informed of the total cost of the insurance over the total duration of the loan, expressed in euros.
the payment of the insurance contribution starts with the signature of the pre-loan offer, unless otherwise stipulated (example: payment on 1er release of funds).
Yes, but before you change insurers, you need to make sure you have your bank's approval for the new insurance contract you want to take.
Indeed, the bank has the right to verify that the new contract is in line with the guarantee level of the original insurance.
You can change insurers at any time after the loan is signed.
You must send the insurer a request for cancelation, in particular by letter, by act of a commissioner of justice, or by any other means provided for in the insurance contract.
You must also send an insurance substitution request to your bank.
In the event of a refusal, the bank must indicate the reasons for the refusal and, if so, the information and guarantees missing from the new contract. The insurance contract is not terminated.
If she agrees, she has 10 working days after receiving your request, to amend the loan agreement by amendment, in particular to indicate the new loan agreement APRC: titleContent.
You must inform the new insurer of your bank's decision by registered mail or e-mail.
each year, the bank must inform you of your right to terminate the borrower insurance contract at any time and how to do so.
Who can help me?
Find who can answer your questions in your region
- Consumer Code: Articles L313-8 to L313-10Information on borrower insurance
- Consumer Code: Articles L313-24 to L313-39Formation of the credit agreement
- Insurance Code: Articles L113-1 to L113-17Obligations of the insurer and the insured
- Order of 29 April 2015 specifying the format and content of the standardized information sheet on insurance for the repayment of a loan
- Decision No. 2017-685 QPC of 12 January 2018: Right to terminate borrower insurance contracts annually
- What to pay attention to before taking out a borrower insurance contract?Banque de France
- Borrower insurance: when and how to compete?Banque de France
- Can I freely choose my borrower insurance?Supervisory and Resolution Authority (ACPR)
- You have trouble insuring yourself because of a health problemBanque de France
- Model standardized information sheet on borrower insuranceLegifrance