Borrower insurance · Checklist
Reading a borrower insurance policy document: the six lines that determine your compensation, and the seventh
Incapacity, compensation, deductible, exclusions, age limits, TAEA: the reading order that reveals what you will receive, and the forgotten seventh line.
A borrower insurance policy document is read in the order of the borrower's questions: the definition of incapacity, the method of compensation (lump sum or indemnity), the deductible and its starting point, the exclusions, the age limits guarantee by guarantee, and then the TAEA. A seventh line sometimes closes the whole: the maximum duration of compensation and the recurrence rule.
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
- The policy document, and not the standardised information sheet, describes the guarantees and the formalities to be completed in the event of a claim.
- Six lines are read in order: definition of incapacity, method of compensation, deductible, exclusions, age limits and TAEA.
- A seventh line, the maximum duration of compensation and the recurrence rule, sometimes closes the guarantee without appearing in the summaries.
- The insurance certificate describes your situation, shares and specific exclusions, whereas the policy document describes the product.
- The list of equivalence criteria retained by the lender is not in the insurer's policy document: it must be requested in writing from the bank.
Seven lines in the policy document state what your mortgage insurance will pay, from when, until when, subject to what, and at what cost. Identify them coldly, before any claim. The reading order, pen in hand; the rest of the subject: the borrower insurance file.
Which document to open?
The policy document, not the standardised information sheet. The sheet is for comparison; the policy document describes the guarantees, their activation and the claim formalities.
- The standardised information sheet, provided very early, for comparison.
Lors de la première simulation
Article L. 313-10 du code de la consommation. La fiche arrive donc bien avant la notice : si vous n'avez que la fiche en main, vous n'avez pas encore le document à lire.
- En vigueur depuis le
- Source
- Article L. 313-10 du code de la consommation — Légifrance
- The policy document of a group contract: in the appendix of the loan offer, otherwise request it.
- The general and special conditions of an individual contract.
- The insurance certificate: your shares, guarantees and exclusions.
The six lines that determine your compensation
- 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 est annexé au code de la consommation (article R. 313-8). Les six lignes qui suivent se lisent garantie par garantie, jamais globalement.
- En vigueur depuis le
- Source
- Légifrance
1. The definition of incapacity and disability
It decides if you receive payment: inability to perform your profession, or any profession? The latter closes most actual stoppages. Also note the disability rate that triggers each guarantee.
2. The method of compensation
It determines how much: a fixed sum, the instalment regardless of your loss; compensatory, the actual loss suffered, sometimes nothing.
3. The deductible and its starting point
It determines when: note its duration and its start date (cessation, consolidation or declaration).
4. The exclusions
They determine under what conditions: general ones in the notice, specific ones on your certificate. Look for the back and the psyche, and any potential buy-back.
5. The age limits, guarantee by guarantee
They determine until when: incapacity almost always stops before death. Calculate your age at the last instalment and the guarantees still active on that day.
6. The AEP and its scope
The price, last of all.
Le taux annuel effectif de l'assurance (TAEA)
Article L. 313-8 du code de la consommation. Le taux de cotisation d'un contrat n'est pas un taux annuel effectif de l'assurance et ne peut pas en tenir lieu.
- En vigueur depuis le
- Source
- Article L. 313-8 du code de la consommation — Légifrance
Two rates on different scopes cannot be compared.
The seventh line: the maximum duration of compensation
Look for “maximum duration of compensation”, “relapse”, “consolidation”: on a long cessation, they set the date when everything stops, the loan still in progress.
The table to keep next to the document
| Line | The word to look for | What it reveals | If it remains unfindable |
|---|---|---|---|
| 1 | “your profession” / “any profession” | Whether you will be compensated | Request the written definition of TPD and PPD retained |
| 2 | “fixed sum” / “compensatory” | What you will receive | Request a worked example on your own instalment |
| 3 | “deductible” / “waiting period” | From when | Request the exact starting point of the count |
| 4 | “exclusions” / “buy-back” | What will never be covered | Request the list of specific exclusions for your file |
| 5 | “age limit” / “cessation of guarantees” | Until when | Request the age limit guarantee by guarantee |
| 6 | “annual effective rate of the insurance” | The real price, comparable | Request the rate and the list of guarantees it covers |
Ask the bank for its equivalence criteria
Le prêteur
Article R. 313-23 du code de la consommation. Les critères opposables sont ceux que VOTRE prêteur a retenus et publiés, pas une liste universelle.
- En vigueur depuis le
- Source
- Article R. 313-23 du code de la consommation — Légifrance
In writing, before obtaining any quote elsewhere. The procedure: the Lemoine Act.
For two people, and on the day of the claim
Check the coverage amount for each individual: see the coverage amount for a couple. Locate the section on “formalities in the event of a claim”: see declaring a work stoppage.
An unreadable line: the sentence to write
“Please indicate to me, for contract no. …, the definition of total temporary incapacity adopted, the method of compensation, the waiting period and its starting point, and the specific exclusions attached to my policy.”
Also check your declaration: the false health declaration. A phone call often resolves the missing line.
This article is for informational purposes only. 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, read together.
Sources
Read next
- Home loan insurance in Lyon: Sandy MASCART
- Mortgage in Lyon: frequently asked questions
- Mortgage insurance share: 100/100 or 50/50, how to choose as a couple What remains due to the survivor depending on the chosen split, the overlooked effect on sickness benefit, and a decision grid based on the income gap.
- Work stoppage and loan insurance: who to notify, within what timeframe, and what blocks the payment Declaring a work stoppage to loan insurance, in the real order: the eight steps, the three documents always missing, and the only fatal deadline.
- False health declaration: nullity of the contract or simple reduction of the indemnity? Nullity or indemnity reduced pro rata: everything hinges on intent, and it is for the insurer to prove it. What is enforceable against you, and how to react.
All articles on this topic: Borrower insurance