In the vast majority of cases, when you take out a mortgage, you also take out loan insurance. This can be renegotiated at any time, reducing the total cost of the loan.
Loan insurance guarantees repayment of the loan to the bank in the event of default by the borrower (death, disability, temporary incapacity to work, etc.). Although such insurance is not compulsory, banks make it a condition for granting credit. The cost can be high, but it is now possible to change at any time by following a few simple steps.
A significant cost
Loan insurance can be expensive, even very expensive. During the first few years of repayment, it can represent up to 40% of the capital repaid.
Since 2022, the Lemoine law has allowed you to change your insurance at any time, free of charge. Renegotiating it can save you several thousand euros: according to UFC-Que Choisir magazine, this can amount to an average of €15,000 over the term of the loan.
Comparing offers
Loan insurance is often taken out with the bank that grants the loan. However, other organisations offer policies that are often cheaper or have the advantage of being tailored to your profile. These policies are marketed mainly by insurers or mutual insurers. The first step is to obtain quotes from these establishments (via a comparator, for example).
Get the same cover
If you want to change your insurance, you need to make sure that the cover offered by the new provider is at least equivalent to the cover you already have. Banks can impose up to 11 equivalence criteria that borrowers will have to meet if they change. That said, you can also take out a policy offering more cover.
Sending the new contract
If the new contract offers the right cover, you should send the bank the general terms and conditions of the new contract for validation. The bank then has 10 days to respond.
A word of advice: before you change your insurance, make an appointment with your bank advisor to tell them about the cheaper deals you've found. Either they'll lower the cost of your insurance, or they'll let you sign with the new provider.
Stay insured !
Before cancelling your old contract, wait until your bank has formally accepted your new insurance. Banks require that the loan be permanently covered. Otherwise, they may demand immediate repayment of the entire capital and interest...
Translated with DeepL.com (free version)
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