Real estate loan insurance: what are the existing guarantees?

Real estate loan insurance protects against “accidents” in life: disability, temporary incapacity for work, loss of a job, death. In the event of a claim, the insurer pays for all or part of the mortgage payment.

Compulsory guarantees

Compulsory guarantees

Some warranties are mandatory, others optional. Let’s start with the mandatory ones:

  • First, the death guarantee. How does it work? In the event of the disappearance of one of the insureds, the insurance takes over. And the heirs will not have to repay the mortgage.

  • The second mandatory guarantee is the total and irreversible loss of autonomy insurance (PTIA). This covers the deadlines when the borrower loses all autonomy and needs to be accompanied in his daily life.

Two other guarantees are mandatory, but only in the context of a real estate acquisition of principal residence. These are the guarantees:

  • total permanent disability (IPT). Monthly payments are covered in case of invalidity greater than 66%;

  • total temporary incapacity for work (ITT). The borrower can not fully and temporarily exercise his profession following an illness or an accident.

Optional guarantees

Optional guarantees

These are the guarantees:

  • Job Loss. As the name suggests, it comes into action in case of job loss. But it must meet certain conditions: unemployment must be linked to an economic redundancy and only employees can benefit. In addition, they must have been on permanent contracts for more than a year.

  • partial permanent disability (PPI). Completes the IPT and applies in case of disability rate between 33% and 66%.

Do you compare home loan insurance? Do not forget the equivalencies of guarantees

Do you compare home loan insurance? Do not forget the equivalencies of guarantees

Since the introduction of the Lagarde law in 2010, borrowers are no longer forced to choose the borrower insurance of their bank. They can choose an “outside” insurance, provided that the guarantees offered are identical to those of the initial offer.

For the record, this type of operation is possible:

  • when negotiating a home loan

  • within one year after signing it (Hamon law, 2014);

  • on each anniversary date of the contract (Annual Termination Act, 2017).

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