By Charlotte Beydon June 14, 2022
By imposing it, the banks offer themselves the guarantee of being reimbursed in the event of invalidity, incapacity or death. This coverage often comes at a heavy cost. Fortunately, with the Lemoine law of February 28, 2022, changing borrower insurance becomes easier. To find out more about the measures put in place, it is in the first part of this article.
In concrete terms, the steps to take out a new contract are simple. After comparing the different proposals and choosing the most suitablea case should be put together.
A letter of delegation of insurance must then be sent to the bank. Finally, it will be necessary to wait about ten days to receive the decision of the latter and to terminate the old contract. We detail all this in the second part of this article.
To find out all about the change in mortgage insurance, the measures of the Lemoine law, the steps to take, as well as to consult our standard letter to send to your bank, continue reading this article.
Change of mortgage loan insurance: changes in 2022
Possibility to change borrower insurance at any time
Before the Lemoine law, changing borrower insurance was tricky. In effect, a certain time had to be respected well specified following the date of signature of the contract. During the first year of the loan, it was possible to withdraw at any time, of course, but then, it was imperative to wait for the anniversary date to send your letter of delegation.
From now on, it will be possible to terminate your commitment at any time. :
- From 1uhJune 2022 for new home loans;
- From 1uhSeptember 2022 for current contracts.
This new right and the methods of implementation will have to be explained and detailed by the insurers. It is a legal obligation imposed on them.
Attention, if it is now possible to change borrower insurance at any time, the fact remains that the bank can always oppose it. Of course, the bank will then have to justify its decision with a legitimate reason, the most common being the non-equivalence of the guarantees between the old and the new contract.
All borrowers had to comply with the imperative of the health questionnaire. Intrusive and discriminating, it is today on the point of disappearing.
Indeed, from 1uh June 2022, this document will no longer be necessary if :
- The loan is less than €200,000 for a single person or €400,000 for a couple;
- The total desired loan repayment is expected before 60eborrower’s birthday.
With this measure, future policyholders declared “at risk” for health reasons will no longer have to bear a voluntary increase in their contribution or various and varied exclusions.
Directly linked to the health questionnaire, the right to be forgotten is non-declaration of a pathology to its future insurer after a certain period of time elapsed since the end of the therapeutic protocol. It is particularly applied for people who have had cancer.
Previously, this 10 year period. Former patients had to report their health problem during the 10 years following their remission and were therefore given additional premiums and exclusions from cover. With the Lemoine law, this period is increased to 5 years and will be extended to people who have contracted hepatitis C.
As of July 31, 2022, it is agreed that the signatories of the Aeras convention will have signed an additional agreement so that other illnesses are also covered. The additional premiums will also be better supervised, or even completely eliminated. Finally, the borrowing ceiling will be reassessed.
The advantages of the borrower insurance changer are multiple. Closer to your needs, more suited to your current situation and your state of health, more economical… By subscribing to a new home loan insurance contract with another insurer, you have a lot to gain. Here’s how.
1. Compare home loan insurance
Before you go headlong into choosing a new insurer, remember that price should never be your sole criterion. It is essential to also take into account the extent of the guarantees offered. And for good reason, it is a sine qua non condition for your bank to accept this termination: your new contract must offer the same level of guarantee as the old one.
To do this, you can you click on the Standard Information Sheet (FSI) which details the criteria used and the minimum guarantees required by the bank to insure your mortgage. This last one was to you discount from the first simulation of your credit. If this is not the case, do not hesitate to turn to your bank to receive it. It will serve as a basis for comparing the different proposals.
Other criteria to keep in mind : warranty exclusions, but also the quality of customer service. Also beware of contracts whose premium is revisable and which can lead to unpleasant surprises.
To simplify your life, the use of a home loan insurance comparator like Magnolia. can be useful since you will receive personalized offers based on your profile in just a few clicks.
Once your choice is made, you will have to get down to preparing your file.
2. prepare your file with all the documents to be provided
The file for changing borrower insurance is slightly different from the one you set up when you applied for a mortgage.
Even if each insurer has its own terms and conditions, here are the main documents to provide :
- A copy of your identity document: a national identity card or a valid passport.
- A SEPA direct debit mandate.
- A copy of the loan offer: the new insurer will thus be aware of the amount, duration and rate of your loan.
- The dated amortization table: in this way, the new insurer knows where you can stand in the repayment of your loan and restore monthly payments as accurately as possible according to the capital you have yet to pay.
- The health questionnaire (if you do not meet the new criteria that allow you to avoid it): made up of 14 simple questions, this form allows your new insurer to take stock of your state of health and to know your degree of “risk” in terms of reimbursement. Your personal history must be detailed (cancer, diabetes, hereditary disease, work stoppages, etc.), as well as your possible treatments in progress.
- A copy of the FSI (Standardized Information Sheet): you must have received it during your first loan simulation. It indicates to the new insurer all the guarantees and insurance conditions of your bank so that it can offer you equivalent coverage.
3. Termination of borrower insurance using a standard letter
Have you received your new insurance contract? Itime to request a delegation from your bank. For this, you must send a letter, by registered letter with acknowledgment of receipt. To the latter, you will attach a copy of the new contract proposed as a replacement.
Here is a sample letter :
[Nom et Prénom]
[Code postal et ville]
[Nom de l’assureur]
[Code postal et ville]
A [Lieu]the [Date]
Reference: Insurance contract no. [numéro de contrat]
Subject: Request for termination of my borrower insurance contract
Hereby, and as authorized by the Lemoine law of February 28, 2022, I inform you of my wish to terminate the mortgage loan insurance contract no. [numéro de contrat] subscribed with your company on [date de la signature du contrat de prêt ou de la prise d’effet de l’assurance].
In accordance with the terms and conditions of this contract, the termination of this contract will take effect on [date].
Knowing the essential nature of insurance to cover my mortgage, I chose new borrower insurance with equivalent guarantees. You will find attached the agreement of the lender concerning this delegation and the validation of this new contract.
Thank you in advance for confirming that my request has been taken into account, as well as for the attention given to my file.
Please accept, Madam, Sir, the expression of my distinguished sentiments.
4. Wait for your bank’s response
The bank has no no obligation to validate your request to change borrower insuranceshe has every right to oppose it if it is justified.
In any case, your mail does not remain a dead letter: the banking institution within 10 working days to let you know of their decision.
- If she refuses: this decision must imperatively be justified indicating the missing or non-equivalent information and/or guarantees. Your initial insurance contract will not be terminated and will remain active until you submit a new application.
- If she agrees: the bank will send you an addendum to the loan offer. She goes recalculate the overall effective rate of your loan, the latter no longer including the cost of insurance. Attention: it does not have the right to modify the initial rate of the loan (whether fixed or variable) to compensate for the shortfall or the conditions appearing on your offer. It cannot be a manufacturer of modification fees, analysis fees or delegation fees.
A question to ask? A sensitive problem? A whole community at your service…
📆 When can you change borrower insurance?
❓ How to change insurance during a home loan?
- Compare insurance and proposals;
- Complete the file and provide the required supporting documents;
- Send a letter of delegation to his bank;
- Read more
📰 What documents are required for the change of mortgage insurance?
- A copy of the loan offer
- A recent amortization table
- A health questionnaire
- Read more
🤔 Can the bank refuse the termination of my borrower insurance?
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