Loan insurance is always linked to the subscription of a loan. By essence, it has a duration strictly limited to that of the loan. It guarantees the repayment of your loan in case of loss of autonomy, incapacity to work due to accident or illness, unemployment, or death.
This insurance is strongly recommended, especially for loans with a significant repayment amount and a high number of monthly installments over an extended period.
Let's imagine the example of a young couple wanting to renovate their apartment. Decor, renovations, and the purchase of new furniture... To finance their project, they plan to take out a personal loan of €10,000 over 3 years.
Well-organized, our young couple knows that they can easily repay their monthly installments of €283.33. But life is full of uncertainties, and it's better to consider everything: job loss, health issues... How to repay in case of a tough situation?
What is loan insurance? What guarantees does it offer?
What is the purpose of loan insurance?
Depending on the cases, insurance may be optional or mandatory.
The borrower can subscribe to it when taking out any type of loan, whether for consumption, real estate, or otherwise.
Loan insurance is limited to the duration of the loan. It serves to guarantee the repayment of the loan in case of unforeseen circumstances: health issues, employment... For example, insurance may cover the repayment of installments if you are on sick leave.
Your lending institution commits to providing you with all the information about borrower loan insurance: coverage, costs, membership and coverage procedures, etc.
These details are included in your contract.
Is it mandatory to insure your loan?
In principle, insurance is optional. However, some institutions make it mandatory, especially when subscribing to a private loan.
In any case, it is your loan agreement that determines whether taking out loan insurance is mandatory or not.
How much does loan insurance cost?
The cost of loan insurance depends on the type and repayment period of the loan. Usually, for a personal or private loan, the insurance tax is paid by the borrower before the insurance contract comes into effect.
What protections does insurance offer?
The guarantees are specific to each insurance. In general, loan insurance offers to fully or partially cover, depending on your level of coverage, the following cases:
Job loss;
Death.
What are the waiting periods and coverage durations?
A waiting period and a maximum coverage duration are provided depending on the guarantee concerned (sickness, unemployment...).
Refer to your insurance contract for precise information about your insurance. It also indicates the membership and coverage procedures, as well as all the details.
For more details,