2023-09-03 22:00:00
Borrower insurance: what is it?
Borrower insurance, also called credit insurance, is a financial lifeline that provides coverage in the event of your inability to repay your loan. If you are faced with an unforeseen event, such as a serious illness, an accident or even death, borrower insurance intervenes to cover all or part of the monthly payments of your loan, thus reducing the financial burden.
Types of coverage: understanding your options
There are different types of coverage within borrower insurance. Death cover and disability cover are the most common. The first ensures the repayment of the loan in the event of the death of the borrower, thus relieving his family of this financial responsibility. The second intervenes in the event of disability, partial or total of the borrower, guaranteeing the assumption of responsibility of the monthly payments. It is essential to fully understand the options offered by your coverage and choose the ones that best meet your specific needs. We also recommend that you go through a loan insurance comparator to make the best choice!
How it works: the borrower insurance mechanism
Borrower insurance operates on the basis of regular premiums that you pay in addition to your monthly loan payments. The amount of these premiums depends on the amount borrowed, your age, your state of health and the type of cover chosen. In the event of a claim, you or your beneficiaries can file a claim with the insurer, who will assess the situation and determine whether the conditions for triggering the cover are met. If this is the case, the insurer will intervene to cover all or part of the repayment of your loan.
Flexible insurance that adapts to your needs
One of the great advantages of this type of insurance is its flexibility. It can be adapted according to your personal situation. For example, if you repay your loan quickly, you can adjust your coverage accordingly. Additionally, if you wish, you can choose 100% coverage or a lesser percentage, depending on your needs and risk tolerance.
Opting for external borrower insurance: it’s possible
Contrary to what one might think, you are not required to take out the borrower insurance offered by your lender. Since the Lagarde law in 2010, you have the freedom to choose external borrower insurance, as long as the guarantees are equivalent to those offered by your lender. This openness to competition allows you to compare offers and select the one that best suits your needs and budget.
Ultimately, borrower insurance is much more than a simple administrative formality. It’s a safety net that protects you and your loved ones from the disastrous financial consequences of unforeseen events. Now you know how you can protect your financial future!
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