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To compare permanent disability and temporary incapacity in a borrower insurance policy, start by distinguishing the situations covered: mortgage insurance refers to permanent disability, whether total or partial, and temporary incapacity for work, whether total or partial. To find out whether a benefit may apply to your situation, check the conditions for making a claim in the information notice.
Permanent disability and temporary incapacity: what should you compare?
The disability described by Service Public is classified as permanent; it may be total or partial. Incapacity for work, on the other hand, is classified as temporary; it may also be total or partial.
Keep this distinction in mind if you are reviewing a period of absence from work: look for the conditions of the incapacity benefit and, separately, those of the disability benefit. For each benefit, look for the risks covered and the conditions for obtaining repayment of the loan.
Borrower insurance may cover all or part of the outstanding mortgage instalments in the situations covered by the policy. To understand what your policy provides, compare the situation described under the benefit with its claim conditions and the extent to which the loan is insured.
Read what each benefit covers
The lender defines the minimum benefits required and what they must cover, including how the risk is covered. This cover may, for example, be provided until the end of the loan or until a certain age.
To compare loan insurance benefits, note what the policy provides for disability, then do the same for incapacity. For each, identify the risk covered, the duration of cover and the conditions required to obtain repayment.
The information notice must list the risks covered and the conditions for making a claim on the insurance. It must include all the policy clauses. Use this notice to find the passages concerning each benefit and note any points to clarify with the insurer.
Examine conditions, exclusions and waiting periods
In the insurance proposal, examine the benefits offered, the conditions that must be met to claim them and the exclusions. Service Public describes this information in particular for the proposal made when a medical questionnaire is required and the application does not fall under the Aeras agreement.
Also compare the waiting periods before cover begins and before benefits are paid: these are among the features that distinguish policies. Look for them in the documents provided and ask for details about how they apply to the benefits you are reviewing.
To organise your review, you can prepare a list of questions: which benefit covers the situation being examined? What conditions appear in the notice? What exclusions and waiting periods are stated in the proposal? Keep the answers with the loan documents so you can review them together.
Check the policy against the lender’s requirements
The lender defines the features of the required insurance according to the type of mortgage and the borrower’s employment status. These include the minimum benefits, what they must cover and the extent to which the loan must be insured.
The standardised information sheet presents the minimum benefits required and the approximate cost of the policy the lender might offer. It also states the details of your loan application. Use it to start your comparison based on the requirements presented for your plans.
The personalised sheet specifies, among other things, the extent to which the loan must be insured, as well as the type and content of the required benefits. Place it alongside the notice and check, benefit by benefit, what the lender requires and what the proposed policy provides.
You can approach another insurer, but the policy you choose must meet the criteria in the personalised sheet provided by the lender. The lender provides an illustration of the loan and the policy it might offer; the standardised sheet states its approximate cost. When making your decision, distinguish this illustration from the process of obtaining the insurance policy.
Review cover during the loan term
You can change insurers after signing the mortgage agreement, subject to obtaining the lender’s approval of the new policy. The lender may check that the new policy meets the level of cover provided by the original insurance.
The process includes a cancellation request to the insurer and a request to the lender to substitute the insurance. If the lender refuses, it must state the reasons and, where applicable, the information and benefits missing from the new policy; the insurance policy then remains in place.
Before choosing a new policy, revisit your comparison of disability and incapacity using the available documents. These points are for information: to assess your situation, reread the applicable clauses and ask for clarification on any that seem ambiguous.