The borrower insurance is a temporary insurance, limited to the duration of the loan, which guarantees its reimbursement in the event of death, disability, incapacity and for certain contracts, the risk of loss of employment.
Why ensure your credit surrender?
The repurchase of credits makes it possible to regroup all of your debts (mortgage payments, consumer credit, tax debts, tax arrears …) in one and only low interest rate loan. The benefits are numerous: payment of a single monthly payment, reduction of the debt ratio and recovery of new investment capacity or savings. As many health risks that could prevent you from assuming the repayment of your loan until its term and jeopardize your life project.
When you subscribe to a purchase of consumer credit or a mortgage repurchase it is often essential to cover by subscribing a borrower insurance, although it remains optional. However, the borrower insurance may be required by the lender: in this case, the insurance costs are included in the total cost of credit. When the insurance contribution is included in the monthly installment, this increases the total amount you will have to repay and lengthens your repayment term. The choice of insurance remains important because it ensures the repayment of the credits subscribed. It protects both the borrower and the credit institution.
You are free to sign or not the proposal of the credit repurchase body. However, for a real estate loan or for a mortgage purchase, the loan buyback insurance is in principle systematically requested by the financial institution. This transaction remains subject to the Lagarde law and Hamon law described below.
Is the borrower insurance issued by the bank obligatory?
Generally, the borrower insures are repurchase of credit with the group insurance of the bank which finances his project. Since the Lagarde law of 2010, the client can refuse the insurance offered by the bank that agrees to finance it. He may decide to choose a more advantageous insurance, especially in terms of premiums. Since the Hamon law of March 17, 2014, the borrower can change insurance without costs and penalty by terminating his insurance up to 12 months following the signature of his offer of credit agreement.
Just like comparators of airline tickets, hotel rooms or vacation rentals, insurance comparators allow the borrower to make his choice and compare the best insurance offer available. This can save you money and halve the cost of your insurance contract. Not insignificant reduction when we know that the amounts can amount to thousands of euros.
In line with this law and since 1 October 2015, banks must specify the cost of loan insurance by indicating a standard rate for insurance, the TAEA (annual effective rate of insurance) or TAEAG (Annual Rate Employees of Global Insurance). This allows for an objective indicator for borrowers to compare insurance rates.
The Hamon law of 1 October 2015 improves the financial conditions of consumers. This law stems from a desire on the part of the public authorities to standardize an information sheet that will enable customers to compare insurance policies more easily and efficiently. From this sheet, each borrower will be able to compare the offers available on the market and make his choice by playing the competition.
How to choose the best credit buyback insurance?
To assist you in your credit consolidation process, you can call on an insurance broker such as Assurgo (Crédigo Group). Assurgo is an insurance broker who works with leading insurers in the market. A financial advisor will advise you on the choice of loan insurance for your debt buyback by offering you the insurance of the establishment of credits or the delegation of insurance the most adapted to your needs.