Introduction
Borrower insurance is a must for anyone looking to acquire real estate with a loan. For new owners, this coverage secures the investment and protects the family against life's uncertainties. In this article, we guide you through the elements to consider when choosing borrower insurance, with a particular focus on the local specifics of Essonne and the support offered by Allianz Evry - MADANI KOITA.
Why is borrower insurance essential when purchasing real estate?
When taking out a home loan, the bank almost systematically requires borrower insurance to protect itself, but also to secure your project. This insurance takes over in the event of death, disability, or incapacity to work, ensuring that the loan repayment is guaranteed. This way, you spare your loved ones, co-borrowers, or heirs from having to bear the debt in case of a setback. This point also reassures banks and can facilitate the acceptance of your application.
A home loan is a long-term commitment, generally 15 to 25 years. During this period, many unforeseen events can occur: illness, accident, loss of income. This is where borrower insurance plays a key role in the financial protection of your household. It offers peace of mind and constitutes, according to the French Insurance Federation, coverage on more than 9 out of 10 home loans in France (see the FFA website).
Contrary to popular belief, borrower insurance does not only protect the bank: it primarily protects the insured and their family, preventing the loan from becoming an insurmountable burden in case of life's accidents. In Évry and Essonne, the advisors at Allianz Evry - MADANI KOITA regularly explain this point during meetings with new buyers.
What guarantees are included in a standard borrower insurance?
Most borrower insurances offer a core of essential guarantees required by most banks:
- Death: in the event of the insured's death, the remaining capital is repaid by the insurance.
- Total and irreversible loss of autonomy (PTIA): if the borrower can no longer perform any work and needs daily assistance, the insurance covers the loan repayment.
- Total or partial permanent disability (IPT/IPT): if the insured becomes disabled after an accident or illness, part or all of the loan may be repaid depending on the degree of disability.
- Temporary incapacity to work (ITT): if the insured is temporarily unable to perform their professional activity, the insurance covers the monthly payments during the stoppage period.
Some more comprehensive plans also offer:
- Job loss guarantee: optional, it takes over in case of involuntary unemployment, often under strict conditions.
- Guarantees tailored to specific professions: for example, self-employed individuals, craftsmen, or medical professionals may benefit from clauses adapted to their activity.
What we often observe is that many new owners do not read the exclusions or limits of coverage in detail. Yet, this is where the unpleasant surprises often lie at the time of a claim. It is therefore essential to ask for a clear point on exclusions and waiting periods with an advisor.
How to choose between the bank's group insurance and a delegated insurance?
At the time of signing the loan, the borrower has a crucial choice: accept the bank's group insurance or opt for delegated insurance from another organization (like Allianz Evry - MADANI KOITA). In France, the law has allowed this freedom for several years (Lagarde law, then Hamon law and Bourquin law).
Group insurance is a collective, standardized contract that pools risks across all the bank's clients. It suits