The application for a mortgage is always accompanied by borrower insurance. For the record, this non-compulsory coverage is valuable during the term of the loan. In the event of an accident, sick leave, disability and even the death of the borrower, it is triggered to repay all or part of the monthly loan payments.
Nearly 8 times out of 10, this protection is taken out with the lending institution. When offering credit, the banker systematically combines a collective insurance contract from its insurance subsidiary. Although simple and quick, this “turnkey” solution is not, however, unique. The Lagarde law of 2010 authorizes the delegation of insurance, ie the option for a borrower to choose his contract with an insurer outside the bank.
However, this individual protection may prove to be more competitive in terms of prices. “Thanks to the delegation of insurance, we often manage to divide by two and sometimes even by three the insurance premium initially offered by the bank. This gain is not neutral and can generate up to 50,000 euros in savings on a 25-year loan,” says Toufik Gozim, founding president of Assurly.
Not 100% insured
This parade is saving because “This expenditure is not neutral in a budget. It represents 20% to 30% of the total cost of a loan”, says Astrid Cousin, spokesperson for broker Magnolia. Another element in favor of the delegation option: it makes it possible to obtain an annual percentage rate of charge (APR) lower than the rate of wear, which is exceptionally low.
“This low level of the usury rate handicaps in particular young people with low incomes who are offered high interest rates by the banks. Result, by combining the nominal rate, the cost of insurance, the costs of guarantee and file, the APR quickly reaches, or even exceeds, the rate of wear. This makes financing impossible. assures Antoine Meeschaert, director of Meilleurtaux Lille. Hence the interest of opting for the least expensive individual coverage.
Another way to control the cost of insurance is, when borrowing together, not to insure 100% on each head, but to opt for 50% coverage. This scenario has the effect of lowering the APR. The broker Empruntis indicates that for a loan of 200,000 euros over 240 months at the rate of 1.55%, insuring 100% on two heads gives an APR of 2.23%. The latter goes to 1.90% with 50% on each head.
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