Borrower insurance
“Your own profession” or “any profession”: the definition of incapacity that decides everything
Two wordings, two worlds: depending on your contract’s definition, the same period of work incapacity either triggers the cover or does not.
A borrower insurance contract defines incapacity in one of two ways: the inability to strictly carry out your own professional activity, or the inability to carry out any activity that can generate income. The first follows the insured’s occupation; the second only applies if you can no longer carry out any activity at all. No text sets this definition: it is to be found in the policy schedule, in the section on the guarantee.
By Sandy MASCART, mandataire d'intermédiaire en opérations de banque et en services de paiement ORIAS 26000541 sous le mandat de CDV PATRIMOINE & ASSURANCE (ORIAS 14005573)
Key points
- A contract adopts either the inability to carry out your own activity, or the inability to carry out any activity that can generate income, which is far more restrictive.
- This definition is not set by any text: it is purely contractual, and only the policy schedule, in the section on the guarantee, allows you to know it.
- A broad definition mainly protects physical occupations, whereas the most restrictive contracts are often offered to them.
- Some contracts do not cover, or only partially cover, the insured who has no professional activity at the time of the claim.
- The reference occupation may be the one carried out at the time of the claim, the one declared upon joining, or the usual activity: this changes everything after a career change.
A single sentence in your policy determines whether a period of incapacity for work is compensated: the one that defines incapacity. If it refers to your specific profession, the cover applies; if it refers to any profession, the same period of incapacity may yield nothing. See also the borrower's insurance dossier, lump-sum or indemnity basis and the guide to guarantees.
The two definitions of incapacity
The contract covers the insured who is unable to carry out strictly their professional activity, or only the insured who is unable to carry out any activity that could provide them with income. The wording is in the guarantee paragraph, in the policy.
These are the two options in the standardised information sheet model (Article R. 313-8 of the Consumer Code).
- décès
- perte totale et irréversible d’autonomie (PTIA)
- incapacité temporaire totale (ITT)
- invalidité permanente totale (IPT)
- invalidité permanente partielle (IPP)
- perte d’emploi
Le modèle de fiche que le code publie encore en annexe de l'article R. 313-8 est antérieur à la loi du 28 février 2022 : ce site n'en publie donc pas la liste comme étant celle du modèle en vigueur. L'alternative de définition, elle, structure le document depuis son origine.
- En vigueur depuis le
- Source
- Légifrance
‘Total’ and ‘temporary’: two words that stop a payment
- ‘Total’: a return to part-time work, even if prescribed, may take you outside the definition.
- ‘Temporary’: as soon as the condition is stabilised, the incapacity ceases and the file must switch to invalidity.
Same medical certificate, two outcomes
A long period of incapacity that prevents standing up and carrying loads:
| Situation | Definition “strictly your occupation” | Definition “any occupation” |
|---|---|---|
| Building tradesperson | Incapable of your trade: the guarantee applies | You can still perform sedentary work: the guarantee may not apply |
| Hospital nurse | Incapable of your trade: the guarantee applies | Same reasoning: the guarantee may not apply |
| Administrative manager | The post remains tenable: the guarantee may not apply | Same outcome, for the same reason |
The broad definition mainly protects physical occupations.
“Any occupation”: a very high threshold
- It is difficult to trigger on an ordinary medical certificate.
- Its assessment is debated among doctors, without an objective measure.
- It often explains an attractive premium: read both definitions together.
No activity at the time of the event
Does the contract cover the insured without professional activity (job seeker, stay-at-home parent, retiree)? In part, or not at all: please check.
Career change: which occupation counts?
The activity at the date of the event, declared at the time of joining or habitually exercised: only the first follows your professional life. Also look for an obligation to declare any change of occupation.
No law fixes the definition
It is contractual. Three texts frame its interpretation:
- Consumer Code, L. 211-1: clear clauses, doubt in favour of the consumer.
- Civil Code, 1190: a standard-form contract is interpreted against the party that proposed it.
- Insurance Code, L. 112-4: exclusions in very prominent characters. A definition is not an exclusion: look for it in the middle of the text.
In the case of invalidity: the same switch, plus an entry rate
The same alternative, plus an invalidity rate and an assessment method fixed in the contract. Read the two lines together: a high rate neutralises a favourable definition (the guide to guarantees).
In the case of delegation: what the bank may require
Le prêteur
La définition de l'incapacité et de l'invalidité figure parmi les critères que la plupart des prêteurs retiennent dans leur sélection publiée. Ce sont ces critères-là, et eux seuls, qui sont opposables.
- En vigueur depuis le
- Source
- Article R. 313-23 du code de la consommation — Légifrance
Does your contract meet the published criterion? A refusal has no basis: require that it be justified criterion by criterion.
Lors de la première simulation
Article L. 313-10 du code de la consommation. C'est le document qui met en regard la définition exigée par le prêteur et celle que le contrat propose.
- En vigueur depuis le
- Source
- Article L. 313-10 du code de la consommation — Légifrance
Check your contract in five minutes
- Open the notice to the incapacity guarantee.
- After 'exercise': 'their activity' or 'any activity'?
- Is the insured without activity covered?
- Read the invalidity section in the same way, including the entry rate.
- Note the answers: this is your actual coverage.
Before signing, request in writing which definition applies, in the case of incapacity and in the case of invalidity. The amount at stake: the instalment formula. Difficult health situation? Refusal, surcharge and AERAS. A telephone point on the structure.
Create your file: the insurance is arranged before submission.
This page has an informational scope. The insurance intermediation activity is carried out as an accessory to the banking operations intermediation activity: it does not constitute an offer of insurance, nor personalised advice on a specific contract.
Sources
Read next
- Home loan insurance in Lyon: Sandy MASCART
- Mortgage in Lyon: frequently asked questions
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- Borrower insurance guarantees: what death, total and irreversible loss of autonomy, total and permanent incapacity, permanent total disability and permanent partial disability actually cover The five guarantees of loan insurance, in the order they apply: what triggers them, who decides, and the line in the policy document that settles it.
- Excess, waiting period, waiting time: when mortgage insurance actually starts paying out Waiting period, excess, waiting time: three often confused timeframes. What each one delays, and the line in the policy document that dates the first payment.
- Mortgage insurance refused or surcharged: the AERAS agreement, appeals and solutions Refusal, exclusion or surcharge: the three levels of AERAS review, the capping mechanism, appeals, and the realistic alternatives when nothing works out.
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