Borrower insurance · Guide
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.
Death and total and irreversible loss of autonomy repay the lender the insured capital. Total and permanent incapacity covers temporary work stoppage, through a lump-sum or indemnity benefit; permanent total disability and permanent partial disability apply when the disability becomes permanent, total or partial, from a rate set in the contract. Each guarantee is triggered separately, and it is the insurer’s medical advisor who decides whether it applies.
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 loan insurance comprises distinct guarantees, subscribed and triggered separately: death, total and irreversible loss of autonomy, incapacity, total disability, partial disability.
- The contract arranges the guarantees by severity for the insurer; in a lifetime, work stoppage almost always occurs first.
- The insurer’s medical advisor, and not the attending physician or the social security system, decides whether the condition corresponds to the definition in the contract.
- Permanent partial disability is almost always optional, and its threshold as well as its proportional benefit are specific to each contract.
- The coverage ratio is declared guarantee by guarantee, not globally: death and incapacity may be covered at different levels.
Five guarantees determine the fate of your loan on the day you can no longer repay it: death, permanent total and irreversible disability, total temporary incapacity, permanent total and partial disability, and invalidity. For each: what triggers it, who decides, and which line to read. The complete subject: the borrower insurance file. See also lump sum or indemnity, “your profession” or “any profession”, deductible and waiting period, the joint share and the Lemoine Act.
What guarantees make up a loan insurance?
Of distinct guarantees: death, permanent total and irreversible disability, total temporary incapacity, permanent total and partial disability, and sometimes loss of employment. The lender chooses those it requires; the contract defines each.
- 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. Son dernier paragraphe décrit encore l'ancienne fenêtre de substitution, remplacée depuis par la résiliation à tout moment.
- En vigueur depuis le
- Source
- Légifrance
In a lifetime, work stoppage comes first, followed by disability, loss of autonomy, and death. Coverage gaps occur between the end of one guarantee and the start of the next.
ITT: Temporary incapacity to work, the most frequently triggered guarantee
- Trigger: Temporary inability to work. Once the condition stabilises, the ITT cover ceases. Your specific profession or any profession? This is the clause that closes the most cases (its article).
- Benefit: Lump sum, based on the instalment; or compensatory, based on the actual loss, sometimes nil if the salary is maintained.
- Decision: The insurer's medical advisor, not your doctor. Social Security compensates for a period of incapacity, the insurer applies a contract.
IPP: Partial permanent disability
Permanent state, partial impairment, above a threshold specific to the contract. Rarely required by the lender: its absence is a choice. The benefit is most often a fraction of the instalment.
IPT: Total permanent disability
Permanent inability to work, from the rate set in the contract. The insurer alone decides the transition from ITT to IPT, and a period without payment may exist. The rate often combines a functional rate and a professional rate in an attached table: request it.
PTIA: Total and irreversible loss of autonomy
Permanent need for a third person for ordinary acts of daily life (model form attached to Article R. 313-8). This is not the third category of disability under Social Security, unless expressly stated. Like death, it repays the insured capital.
Death: The simplest to trigger
A death certificate, a file, a payment of the insured capital to the lender.
- Each guarantee has a maximum age: see borrowing after sixty.
- Suicide has its clause: note its duration and the case of a loan for housing.
- The proportion sets the balance left to the co-borrower or to the estate.
Job loss: to be assessed before paying
Optional, it applies only to dismissal, after the waiting period and the deductible, within limits per period and in total duration. Ask how much it can pay at most on your loan.
Who decides that a guarantee applies, and how to contest it?
The insurer, through its consulting physician, according to the definition in the contract. In case of disagreement: expert assessment, joint expert assessment, then mediator and judge.
- Request the written reasoning, supported by the relevant clause.
- Have yourself assisted by a doctor of your choice at the expert assessment.
- Request the joint expert assessment if the opinions differ.
- Submit complaints, then the mediator: see complaints and mediation (FR).
Three documents, one is legally binding
The standardised sheet is used for comparison, the notice describes the guarantees, the general and special conditions are legally binding on the day of the claim.
Lors de la première simulation
Obligation posée par l'article L. 313-10 du code de la consommation. Une simulation qui rend un prix est une première simulation : la fiche est due à ce moment-là, pas à la signature.
- En vigueur depuis le
- Source
- Article L. 313-10 du code de la consommation — Légifrance
The notice (paragraph 1 of Article L. 313-29) accompanies the quotation and reminds you of the right to cancel at any time (Article L. 313-8). A price without it? Request it.
What the bank requires is not what the contract offers
Le prêteur
L'article R. 313-23 du code de la consommation, qui organise la substitution demandée avant l'émission de l'offre, impose au prêteur d'indiquer les types de garanties exigées et la part du capital à couvrir garantie par garantie, puis de rappeler les critères qu'il retient pour apprécier l'équivalence.
- En vigueur depuis le
- Source
- Article R. 313-23 du code de la consommation — Légifrance
The proportion is declared guarantee by guarantee. Request the selection of criteria from your bank: it is due to you.
Comparing two contracts: a single displayable rate
This rate is the difference between two APRs, with and without the insurance (Article R. 314-12 of the Consumer Code), not a premium divided by a capital.
Article R. 314-13 du code de la consommation. Sans cette liste, deux taux ne sont pas comparables : ils peuvent porter sur des périmètres de garanties différents.
- En vigueur depuis le
- Source
- Article R. 314-13 du code de la consommation — Légifrance
Different lists of guarantees? You are comparing two products, not two prices.
The five lines to note in your notice
| Line to look for | Where it is located | What it determines |
|---|---|---|
| The definition of incapacity used for temporary total disability and permanent disability | Paragraph of each guarantee | If the guarantee applies |
| Whether the benefit is a lump sum or indemnity-based | Same paragraph, often one line below | How much you receive |
| The entry threshold for permanent disability, and the cross-reference table | Permanent disability paragraph, and contract appendix | From when permanent disability is recognised |
| The period during which the loss remains at your expense | Time limits paragraph | When the first payment is made |
| The term of each guarantee, taken separately | Table of maximum ages | Until when you are covered |
Before signing, request in writing, for each required guarantee: which definition, which mode of indemnification, which time limit. Review your five lines by telephone.
This page has an informational scope. The activity of insurance intermediation is carried out as an ancillary activity to the activity of intermediation in banking operations: it does not constitute an offer of insurance, nor personalised advice on a specific contract.
Create your file: loan and insurance, studied together.
Sources
Read next
- Home loan insurance in Lyon: Sandy MASCART
- Mortgage in Lyon: frequently asked questions
- Flat-rate or indemnity mortgage insurance: the clause that determines what you will receive Two contracts covering “ITT” may pay out your full instalment or nothing at all. Where to find the clause, and how to determine what it will pay you.
- “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.
- 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.
- Is borrower insurance mandatory? No, but the lender may require it: who decides what No law requires you to insure a mortgage, but the lender may require it: what the lender decides, what you choose, and what to do in the event of a refusal.
All articles on this topic: Borrower insurance