There is no law requiring borrowers to purchase insurance for their home loan . However, in fact, the bank will systematically ask him to do so before granting credit .
Thus, the latter will protect against the risk of unpaid if the borrower was no longer able to repay his credit .
Beyond that, the bank will also require that the borrower insurance contract contain certain unavoidable guarantees .
It is impossible to ignore the “death-disability” guarantee
If it is also not mandatory under the law, the ” death-disability ” guarantee is a must in real estate loan insurance .
As its name suggests, the latter covers you in the event of death or disability preventing you from exercising a professional activity and thus from collecting income.
Its operation is simple: in both cases, it is the insurer who replaces you and makes the repayments for you . It is not therefore on your family that will be the burden to repay the outstanding capital.
What if I refuse to take out “death-disability” insurance?
If you refuse to take out this guarantee, the lender will sometimes agree to grant you the credit provided you pledge it .
This means that you will have to use a real estate property that you own or a life insurance contract to guarantee the credit . It can then be seized by the bank if you do not repay your loan.
The “job loss” insurance strongly recommended
Unemployment insurance is not as unavoidable as disability death insurance and your bank may sometimes agree to grant you the loan, even if you do not buy it.
On the other hand, it remains strongly recommended because if you come to lose your job , it is again the insurer who would replace you to refund the remaining share of capital .
However, the loss of employment insurance will not cover you:
- if you resign
- if your CDD ends
- if your company ends your probationary period
- if you are on partial unemployment