Mortgage insurance: understanding the Lemoine law
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Useful documents – borrower insurance
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Are you arranging a mortgage or reviewing your existing insurance? This guide explains cover, policy costs and what to check before changing your insurance.
In Gex, Sabri HAMDA and Alperea help you review proposals: the lender’s cover requirements, each borrower’s insured share, waiting periods and exclusions. Any potential saving must be assessed on comparable policies for your circumstances.
These four official documents help you understand the framework for loan insurance and prepare discussions with your bank. They reproduce dated legislation or opinions; also consult the consolidated provisions and information from the issuing bodies.
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Guide contents
Click a section to go straight to the topic that concerns you (Loi Lemoine, external insurance, TAEA, steps, mistakes, FAQ).
The standardised information sheet (FSI) presents the main policy features. Also request the lender’s personalised requirements: these specify the cover and insured shares to use for the comparison.
1) What is borrower insurance?
Borrower insurance protects both the borrower and the bank: if a life event occurs (death, disability, inability to work…), the insurer covers all or part of the repayments or outstanding principal, according to the policy’s cover.
Is it compulsory? Not strictly by law. In practice, however, a bank almost always requires minimum cover (death + PTIA, often ITT/IPT) to grant a mortgage.
2) Bank group insurance vs external insurance
The policy offered by your bank and an external policy may differ in price and cover. Compare costs over the same period, insured shares and claim conditions, taking account of the cover required by your lender.
3) Loi Lemoine: what you can do today
For loans and policies covered by the French rules, the Lemoine law allows insurance to be changed at any time with equivalent cover. The lender must notify its decision within ten working days. For CHF financing or a contract governed by Swiss law, first check the rules applicable to the case.
Under these rules, the lender cannot charge additional fees for analysing the substitute policy or issuing the amendment, nor change the loan rate or terms in return for accepting external insurance. Any fees for the new policy or intermediary must still be included in the cost comparison.
Code de la consommation, L. 313-30 · L. 313-31 · L. 313-32 · Code des assurances, L. 113-12-2
For eligible loans, no health information or medical examination may be requested if the insured share of total outstanding loans does not exceed €200,000 per insured person and the loan ends before that person’s 60th birthday. Both conditions must be met.
4) TAEA: the figure for a meaningful comparison
The TAEA (annual effective insurance rate) expresses the cost of your insurance. It is a key indicator for comparing bank and external insurance, but it is not enough: you must also check the cover, waiting periods, exclusions and definitions (ITT/IPT/IPP…).
5) Changing borrower insurance: step by step
- Gather the FSI, the lender’s personalised requirements, your existing policy and the loan details.
- Obtain a proposal and check cover, insured shares, exclusions, costs and eligibility conditions.
- Send the substitution request and new policy to the lender; keep proof of receipt.
- The lender responds within ten working days. Any refusal must be explicit and explained; approval leads to an amendment without additional bank fees.
- Coordinate lender approval, the existing policy’s end date and the new policy’s start date. Do not cancel before continuous cover has been arranged.
6) The most common mistakes
The 3 costly mistakes: (1) comparing only price without checking equivalent cover, (2) overlooking exclusions (back/mental health/sport), (3) sending an incomplete application (which delays the bank’s response).
7) Borrower insurance FAQ (frequently asked questions)
Can I change insurance during my mortgage?
For loans and policies covered by the French rules, the Lemoine law allows a change at any time, subject to equivalent cover accepted by the lender. CHF alone does not determine which law applies. Coordinate lender approval, cancellation and the new policy’s start date to maintain continuous cover.
Can my bank refuse an external policy?
Under the relevant French rules, the lender cannot refuse a policy with an equivalent level of cover. It must respond within ten working days and give all reasons for any refusal. Substitution cannot justify changing the loan rate or terms, or charging additional bank fees. Any fees for the new policy or intermediary must be identified separately.
How can I compare two policies?
Start with the lender’s personalised requirements. Compare over the same remaining term with the same insured shares, allowing for cover, exclusions, waiting periods, changing premiums and fees. The TAEA indicator adds context but does not replace a detailed remaining-cost comparison.
Does an older mortgage always offer savings?
No. The outcome depends on factors including the current policy, age, outstanding balance, cover and the proposal obtained. A lower initial premium alone does not establish a saving over the remaining term.
How do you choose mortgage protection insurance?
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Official
documentsDownload the reference texts: Loi Lemoine, FSI decree, CCSF (equivalent cover), ACPR (good practice).
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