What is home loan insurance used for?

What is home loan insurance used for?

Borrower insurance is coverage that protects you in the event of a disaster preventing you from honoring the repayment of your monthly mortgage payments. It is a guarantee of security for the lender that grants you the loan. In the event of a work stoppage, disability, death or other incident compromising the repayment of your mortgage, loan insurance will cover the repayment of the monthly payments due.

When you take out your mortgage, the lender will offer you to take out loan insurance. You are free to choose the contract of your bank or to turn to the insurer of your choice.

Under no circumstances will the bank be able to refuse your loan or modify its conditions, provided that you choose external loan insurance. It is strictly prohibited by law.
Our tools on mortgage loan insurance
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What is the best borrower insurance rate?
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What will your monthly loan insurance payments be?
What is the cost of mortgage loan insurance?

The loan insurance rate depends mainly on 3 elements:

    the age of the borrower;
    medical risk;
    the loan amount.

In addition to these three factors, the guarantees you choose will also affect the cost of your mortgage loan insurance. It is easy to see very large differences from one insurer to another for the same file because the risk assessment can be very different. There are nearly 70 different contracts in France.

Here is a comparison of the rates between a bank insurance and an insurance delegation. Insurance outside banks generally offer more competitive rates because the margins are much lower:
Borrower profile Bank insurance rate External insurance rate
25-35 year old borrower 0.23% 0.09%
35-50 year old borrower 0.32% 0.15%
50-70 year old borrower 0.43% 0.29%
Borrower over 70 years old 0.70% 0.42%
Simulations for a loan of € 200,000 over 20 years for the purchase of a primary residence (2022 rate)

Home loan insurance can be up to one-third of the total cost of your credit. To compare different loan insurance, the indicator to use is the TAEA which calculates the total cost of loan insurance (all fees included).
How does mortgage insurance work?

Home loan insurance is coverage that protects the borrower in the event of death or a serious health problem (accident, illness, etc.). Depending on the guarantees subscribed, you will be more or less covered and therefore compensated in the event of a problem. For rental purchases, only Death and PTIA guarantees are mandatory, for residential purchases, IPT and ITT guarantees must be added.
Insurance guarantees When does the guarantee trigger?
Death guarantee In the event of the death of the insured, the outstanding capital is fully reimbursed by the insurer.
PTIA guarantee In the event of total loss of autonomy and the need to be assisted in all daily tasks, the outstanding capital is fully reimbursed by the insurer.
IPT guarantee In the event of severe disability of the insured (rate greater than 66%), the outstanding capital is fully reimbursed by the insurer.
IPP guarantee In the event of severe disability of the insured (rate greater than 33%), the outstanding capital is fully reimbursed by the insurer.
ITT guarantee In the event of prolonged sick leave by the insured (greater than 90 days), the insurer will reimburse the monthly payments.
Job loss guarantee In the event of redundancy (only works for employees on permanent contracts for more than one year), the insurer reimburses the monthly payments.

    The level of repayment of your mortgage by your insurer will also depend on the portion chosen by the borrower (between 50% and 100%).

What are the best home loan insurance?

Here is our comparative table of the best mortgage insurance. To find out your personalized rate, do not hesitate to use our simulator:
Insurance rate End of guarantees Our opinion
naoassur From 0.07% 85 years Particularly competitive prices with solid guarantees. One of the best offers on the market.
axa 1 From 0.08% 85 years Extremely attractive coverage with, in particular, the cost of half-time therapy.
cnp From 0.08% 85 years In the case of ITT and IPT, 100% of the monthly loan payment. Competitive offer.
malakoffmederic From 0.09% 85 years Excellent management of ailments with an extended death guarantee.
swisslife 1 From 0.10% 85 years Extended guarantees and very attractive price offer. Efficient and professional support.