The insurance delegation; What is it ?
The delegation of insurance consists of a borrower to freely subscribe his loan insurance contract with the insurance company of his choice, without the lending institution can oppose it when the selected contract presents a guarantee level at least equivalent to that of the loan insurance contract he has offered to his client.
A delegation of insurance is possible both in terms of mortgage loans and consumer loans.
More on Insurance Delegation
You hesitate between the subscription of the borrower insurance proposed by the lending bank and a delegation of insurance? Here’s everything you need to know about the delegation of insurance and the benefits it offers you compared to a bank group insurance contract.
Since the Lagarde law of 2010, borrowers have the possibility to insure their credit with an insurance of individual loan subscribed under the delegation of insurance. They can refuse to contract the lender’s group insurance contract to insure their credit with the insurance company of their choice. In case of insurance delegation, the guarantees of the contract chosen by the borrower must be equivalent to the guarantees of the group contract of the lending bank.
The delegation of insurance has significant advantages over bank group insurance. Indeed, it is more advantageous for people who present only low risk of failure to repay (young borrower under 40, no smoking) but also for people at high risk because of their age, health problems, the practice of a dangerous occupation and the practice of a sporting activity or risky recreation. By delegating your insurance, you benefit from a customized contract whereas with group insurance the contract is classic and collective: it does not really take into account your specific needs and covers all subscribers in the same way. With the insurance delegation, a young borrower can easily reduce the overall cost of his mortgage by several thousand euros!
The word of the broker
The bank group contract does not provide for the same method of compensation for total and partial permanent disability guarantees, and for temporary and total work incapacity as an individual insurance contract. Compensation is compensatory: only the loss of income incurred by the insured is covered, after deduction of social benefits paid by the health insurance or a provident contract.
The individual insurance contracts allow for a lump sum compensation: the compensation paid is calculated in proportion to the remaining monthly payments, within the limit of the insured portion. This type of compensation is therefore more advantageous.