Life insurance on loan : What if you saved 30%?

By Arnaud Campion
Borrower's insurance

Compulsory with your mortgage, life insurance is an asset in terms of family security. However, the bill can quickly escalate to colossal amounts. So what are the criteria that weigh in the balance? And above all, is it still possible to change Life insurances ?

What is life  insurance for?


Although it is not required by law, life insurance is almost compulsoryfor every mortgage subscription. The benefit for the borrower? The insurer therefore undertakes to repayment of the remaining capital in the event of death or disability, and to assume the monthly loan payments in the event of temporary disability. From guarantees Loss of employment can also be added to the insurance contract. However, life insurance can be pricey: between 20 and 25% of the total cost of a morgage !


Check competition to find the best rate


Because banks still tend to offer the group policy of their insurance subsidiary, few borrowers take out a guarantee from an insurance company outside the lending bank. And yet, the insurance taken to a competitoe was democratized in 2008 with the Lagarde law, Hamon in 2014 and the Bourquin amendment in 2018. The trick tofind the best insurance rate quickly? Get a quote from your insurance broker. Perfect to find a suitable contract in a few clicks and save money!


Criteria to be taken into account


There are three criteria for obtaining loan insurance: the age of the borrower, the borrower's current and past health status, and the amount of loan borrowed. But these are not the only arguments on the table. A particular pathology (diabetes, hypertension, melanoma...), a dangerous sport (wingsuit, climbing), or a risky profession (policeman, firefighter, deminer) are likely to raise the bill or never be covered. So, playing the competition can allow a 36-year-old person to make substantial savings in the order of 15,000 euros!


Is it still too late to change my live insurance?


Thanks to the Hamon law (2014), you have the possibility to change your contract within 12 months of signing it, provided that you present the same guarantees to the lending bank. And since 1 January 2018, theBourquin amendment allows its holder to terminate any current contract annually, provided that the bank is notified at least two months before the maturity date.

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