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To compare mortgage borrower insurance, start with the standardized information sheet, then compare the proposals against the personalized sheet provided by the lender. The standardized sheet sets out, among other things, the minimum coverage required and an estimated cost of the insurance the lender might offer. The personalized sheet specifies the features the policy must have.
Keep your project documents close at hand and compare the information point by point. The aim is to understand what the lender requires, what each insurer offers and the circumstances in which the cover applies.
Read the two sheets together
After providing an illustration of the loan and the insurance it might offer, the lender provides a standardized information sheet and a personalized sheet. The standardized sheet sets out the details of the loan application, the minimum coverage required and the approximate cost of the policy the lender might offer.
The personalized sheet specifies the level to which the loan must be insured, as well as the type and scope of the coverage required. The chosen policy must meet the criteria defined in this sheet.
The lender sets its requirements according to the type of mortgage requested and the borrower's employment status. Use the documents provided for your own project as the starting point for the comparison, distinguishing the lender's requirements from its insurance estimate.
Compare the coverage required and offered
Start by identifying the minimum coverage in the standardized sheet, then check its type and scope in the personalized sheet. For each proposal, compare this information with the policy notice and the documents provided by the insurer.
Risks covered and level of cover
The minimum coverage required may include death or disability. Compare the risks mentioned in the lender's documents with those listed in each proposal. Coverage with the same name also warrants a review of its scope.
The lender specifies how the risk must be covered, for example until the end of the loan or until a certain age. Also check the level to which the loan must be insured and compare this requirement with the proposal.
Borrower insurance may cover all or part of the outstanding loan repayments in certain situations, including death, total and irreversible loss of autonomy, disability or inability to work. Job loss cover may be offered, and the borrower is free to take it out or not.
Conditions, exclusions and waiting periods
The policy notice lists the risks covered and the conditions under which the insurance can be claimed. All policy clauses must appear in this notice. Read it to understand the conditions that must be met for the loan to be repaid.
Depending on the borrower's circumstances, the insurer's proposal specifies, among other things, the coverage granted, the conditions for making a claim and the exclusions. Identify these details in the documents received and ask for clarification on any points that are unclear.
Initial waiting periods and excess periods are among the features that distinguish policies. Note the periods specified for each proposal so that you can examine them alongside the coverage and its claim conditions.
Compare the cost over the term of the loan
The cost shown in the standardized sheet is approximate: it takes into account, among other things, the loan details, age and the coverage envisaged. Use this estimate as a starting point, then examine the information provided with the proposals.
Depending on the borrower's circumstances, a proposal specifies, among other things, the monthly premium over the entire loan term and the cost of the insurance. You must also be informed of the total cost of the insurance over the entire loan term, expressed in euros.
For each proposal, compare the premium amount and total cost with the corresponding coverage and conditions. This lets you consider the cost alongside the coverage being examined, rather than comparing an amount in isolation.
The illustration presents the loan and the insurance policy the lender might offer. Then take time to examine the policy documents before making your decision.
Before choosing: check and seek clarification
The lender may offer its own policy or a partner's group policy, but you are free to approach another insurer. In all cases, the chosen policy must meet the criteria in the personalized sheet.
To complete your comparison, return to the personalized sheet and check each point against the proposal under consideration: the level insured, and the type and scope of coverage. Then reread the policy notice for the risks covered and claim conditions, and examine the exclusions and periods specified in the documents received.
If any wording calls for an explanation, ask for clarification before choosing. This method helps you read the documents; for support with the process, Service Public mentions the departmental housing information agency, or Adil, among other sources.
Source: Service Public, obtaining borrower insurance for a mortgage.