Death cover
The core cover of borrower insurance: on death, the insurer repays the outstanding balance up to the insured share. It shields co-borrowers and heirs from a debt they could not bear. It is the minimum cover required by any bank.
Key points
- Mandatory cover: the insurer repays the outstanding balance on the borrower's death.
- Repayment is capped at the insured share assigned to the deceased borrower.
- Protects co-borrowers and heirs from an unwanted residual debt.
- Coverage applies up to a maximum age defined in the policy, often between 65 and 80.
Frequently asked questions
How is the death cover claim triggered?
On the insured's death, the beneficiaries or co-borrower notify the insurer, providing a death certificate and the loan file documents. The insurer calculates the outstanding balance at the date of death and repays the bank directly up to the insured share. If the share is 100%, the balance is fully cleared with no burden on the survivor.
Why is death cover the minimum cover required?
From the bank's perspective, death cover is the only guarantee covering the ultimate insolvency risk: death renders the borrower permanently unable to repay. Without it, the bank would be exposed to a permanent default that recovery against the estate does not reliably cure. It is therefore systematically required as a loan approval condition.
What is the difference between death cover and total irreversible loss of autonomy cover?
Death cover is triggered by the insured's death, while total irreversible loss of autonomy cover applies when the insured is still alive but in a state of total, irreversible disability requiring permanent third-party assistance. Both guarantees are treated as equivalent from an indemnification standpoint: in both cases, the outstanding balance is repaid to the bank. Together they form the inseparable core of any borrower insurance policy.
In practice
On a €180,000 joint loan with a 60% share assigned to the main income earner, their death mid-loan with €110,000 outstanding triggers a €66,000 payment by the insurer to the bank, leaving €44,000 for the co-borrower to repay.
Official sources
- Borrower insurance: death, disability, incapacity guarantees · Service-Public.gouv.fr
- Borrower insurance for a mortgage · Service-Public.gouv.fr
- Law of 28 February 2022 (Lemoine Act) · Vie-publique.fr