Borrower insurance
A contract that covers all or part of the installments in the event of the borrower's death, disability or, depending on cover, inability to work. Though not legally mandatory, it is systematically required by banks. It can be over a third of a loan's cost, which is why putting it in competition matters so much.
Key points
- It covers the installments in case of death, disability or inability to work.
- Not legally required, but systematically demanded by banks.
- It can represent over a third of a mortgage’s total cost.
- Since the Lemoine law, it can be cancelled and switched at any time.
Frequently asked questions
How does borrower insurance work?
The insurer undertakes to repay all or part of the outstanding capital if a covered event occurs (death, total loss of autonomy, work disability, invalidity). The protection level depends on the cover taken and the share insured on each borrower. The premium is computed on the initial or outstanding capital depending on the contract.
Can you choose an insurer other than the bank’s?
Yes, it is insurance delegation: the bank cannot refuse an external policy offering at least equivalent cover. For a young, healthy profile, it often means several thousand euros in savings. The Lemoine law now allows this switch at any time, free of charge.
What mistakes should be avoided on borrower insurance?
Subscribing without comparing the group contract to a delegation, overlooking the cover definitions (especially work disability, which varies widely), or answering the health questionnaire loosely. A false statement can void the contract at claim time, exactly when cover matters most.
In practice
A couple of non-smokers in their thirties insured 100/100 can cut their insurance cost threefold by leaving the group contract for a delegation, while keeping the equivalent cover required by the bank.
Put it into practice with CourtImmo
See how CourtImmo software helps brokers on this topic:
Official sources
- Borrower insurance for a mortgage · Service-Public.gouv.fr
- Law of 28 February 2022 (Lemoine Act) · Vie-publique.fr