You have taken out mortgage loan insurance with your bank and you want to change it to benefit from more advantageous guarantees? It is quite possible to terminate your insurance contract as soon as the loan is signed.
But how to proceed?
What steps to terminate your loan insurance?
If you have taken out borrower insurance with your bank, you have the option of terminating it. Indeed, the Lemoine law allows you to change mortgage insurance in the first 12 months following the signing of your loan without fees or penalties. Thus, this law allows you to benefit from more advantageous guarantees and a more competitive rate.
To change your insurer, you must follow these steps:
- Compare the guarantees and rates of borrower insurance:
Before changing borrower insurance, you must compare the guarantees of the different borrower insurance available on the market in order to find the insurance that best suits your needs.
- Take out the new borrower insurance:
Then, you must take out your insurance by completing a medical questionnaire. The insurer may also ask you to undergo a medical examination to assess your state of health.
Note that the bank has 10 days to study the equivalence of guarantees. It can either validate the new contract or indicate the guarantees that are not equivalent.
- Terminate your current borrower insurance:
Once you have taken out the new borrower insurance, you must cancel your current insurance by sending a registered letter with acknowledgment of receipt to your bank. You must give two months’ notice before the expiry date of your contract. Your new insurer must also be informed of the bank’s agreement in order to be able to set up the new contract.
Oradéa Vie accompanies you to change mortgage insurance in all serenity.
Borrower insurance: what guarantees can it include?
The borrower insurance contract is a contract that covers the repayment of a mortgage in the event of incapacity, disability, death or loss of employment of the borrower. The borrower insurance concocted by Oradéa Vie aims to replace the collective contracts offered by the banks. The latter offers a high level of protection against risks that could lead to inability to pay during the term of the loan.
The main guarantees:
All borrower insurance contracts must include death cover, which is often accompanied by Total and Irreversible Loss of Autonomy cover (PTIA). In the event of a claim, these guarantees allow the insurer to repay the outstanding loan capital.
- The incapacity for work guarantee:
Although not mandatory, Temporary Incapacity for Work (ITT) and Permanent Disability guarantees are often recommended by credit organizations to ensure good loan coverage.
In addition to the classic guarantees, the insurer offers additional guarantees covering several risks such as: partial disability, psychological disorders, as well as job loss.
The subscriber is not required to include all these guarantees in his contract, but must consider the requirements of his bank as well as his situation to determine the level of protection that would suit him best.
Oradéa Vie offers reimbursement conditions similar to those offered by other companies in the highly competitive insurance delegation market.
What is the average cost of home loan insurance?
The average cost of home loan insurance depends on several factors, such as:
- The duration of the loan;
- The type of home loan;
- The type of insurance (individual, group);
- The desired guarantees;
- The state of health of the borrower.
In general, the cost of insurance is expressed as a percentage of the capital borrowed and can vary from 0.15% to 0.5% or even more.
The contribution amount includes:
- The monthly amount of the insurance;
- The annual insurance rate;
- The effective annual rate of insurance (TAEA);
- The overall cost over the term of the loan;
- The annual percentage rate of charge which includes the costs related to the loan and the insurance.
Note that the price of home loan insurance depends on the calculation methods used. We distinguish :
- The flat rate: more advantageous for young and healthy borrowers.
- The personalized rate: more advantageous for older borrowers or those with health risks.
In conclusion, changing borrower insurance for your home loan can be an important decision that can allow you to make significant savings. By knowing the different steps to follow and the key elements to consider, you may be able to find the most suitable insurance offer for your needs.