Loan insurance compensates the borrower following various events that may lead to an inability to repay. However, whatever the risk, it is strongly recommended to get the best information from your insurance.
Loan insurance an element to take absolutely into account in your budget. Following these brief explanations, we then ask the question of the criteria for loan insurance that are taken into account as well as the different forms of insurance that may exist on the market.
Loan insurance criteria to take into account
With identical guarantees, the cost of loan insurance can be higher or lower. Loan insurance takes into account many criteria such as the age of the borrower, the mortgage applied for, its duration, the number of people to be insured, etc.
Let us not forget that this loan insurance allows the bank to protect itself in the event of non repayment of the borrower. Consequently, the more fragile the criteria, the higher the cost of insurance.
Today, there are two types of insurance: group insurance and individual insurance. The bank which grants you its credit will offer you its group insurance contract (group insurance). You should know that this insurance is offered to all customers of the bank, under the same conditions and at almost similar rates.
The objective of this loan insurance is to spread the risk among all the borrowers. Therefore, you are quickly harmed if you are young and healthy, as the cost of your loan insurance will be very high.
This is why since 2010, it is now possible to compare different loan insurance offers, called individual insurance, and choose the one that suits you best. The so-called individual loan insurance is adapted to the profile of the borrower, thus allowing certain borrowers to make real savings.
So do not hesitate to inquire and compare the loan insurance offered by your bank versus individual insurance.
Take into account the cost of loan insurance
Do not forget to take into account the cost of your loan insurance in your overall budget because this, depending on your profile, can represent up to 30% of the total cost of your credit.
So be sure to choose the loan insurance that works best for you and costs you the least.
TO REMEMBER !
- Loan insurance can be a cost if you don’t pay attention
- You can choose between group or individual insurance according to your profile
- Compare insurance to get an attractive insurance rate