To obtain credit, a lender will certainly require you to take out borrower insurance to accept your request, although the law does not require you to do so. This insurance not only protects the bank, but also the person who borrows, hence the term borrower protection . But what exactly are the risks covered by borrower insurance ?
The death
Thanks to this guarantee, if the borrower dies, it is his insurer who will be responsible for repaying the remaining amount of the loan in place of the heirs of the deceased. If the loan is individual, the repayment will correspond to the entire credit. If the loan is common, the repayment made will be equivalent to the portion previously allocated to the deceased borrower. Note that the death guarantee will no longer be valid beyond a certain age limit: between 35 to 80 depending on the contract.
Job loss
Optional, the loss of employment guarantee allows the reimbursement of the loan by the insurance in the event that the borrower loses his job due to a dismissal. This guarantee only comes into play if the subscriber is compensated by Pôle Emploi. Other causes of job loss do not apply this guarantee. In addition, its protection ceases from the age of 55.
Temporary incapacity for work
Thanks to the Temporary Incapacity for Work (ITT) guarantee, the borrower‘s insurance reimburses the monthly payments of the borrower who is unable to carry out any professional activity. This reimbursement is only valid for a maximum period of 3 years. After this period, the insurance can take care of the payment of the totality of the loan (rate of disability recognized by social security) or not (rate of disability lower than the first category of disability).
Invalidity
Each degree of disability corresponds to a very specific type of cover.
Total and Irreversible Loss of Autonomy (PTIA)
The TILA warranty occurs when the degree of disability of the borrower is recognized 3 rd category (total disability, absolute and final) by social security. This guarantee comes into play when the 2 conditions are met:
- The inability to perform the actions of daily life without the assistance of a third person;
- The inability to exercise any gainful activity.
Total Permanent Disability (IPT)
The IPT is a disability less than the TILA . It is classified 2 nd category by social security. It prevents the exercise of a job permanently and definitively. Unlike the death guarantee or the PTIA guarantee, the IPT guarantee is not compulsory . If the lender does not require it, you can choose not to subscribe to it. This guarantee stops covering the subscriber from the age of 65.
Permanent Partial Disability (PPI)
The IPP is defined by Social Security as the first category of disability. The corresponding disability rate is between 33 and 66%. The IPP guarantee comes into play when the borrower is unable to exercise his professional activity full time. Like the IPT warranty, the IPP warranty is optional and its coverage also ceases after 65 years. Note that this guarantee can only be taken out in addition to an IPT guarantee.
Total Permanent Disability (IPT)
The IPT is a disability less than the TILA . It is classified 2 nd category by social security. It prevents the exercise of a job permanently and definitively. Unlike the death guarantee or the PTIA guarantee, the IPT guarantee is not compulsory . If the lender does not require it, you can choose not to subscribe to it. This guarantee stops covering the subscriber from the age of 65.
Permanent Partial Disability (PPI)
The IPP is defined by Social Security as the first category of disability. The corresponding disability rate is between 33 and 66%. The IPP guarantee comes into play when the borrower is unable to exercise his professional activity full time. Like the IPT warranty, the IPP warranty is optional and its coverage also ceases after 65 years. Note that this guarantee can only be taken out in addition to an IPT guarantee.
