The three cases examined are the following1

BERNARD Short, Les Echos

When one borrows, insurance is required by the Bank that lends the capital. This insurance must support the repayment of the loan (or what remains to be paid) for the death of the borrower or loss total and irreparable of his professional activity on a disability resulting in the decrease or loss of revenues. Borrowers candidates most often join a group insurance proposed by the Bank offering its contract "House." This insurance guarantees collectively under the same conditions (with some rare features) all clients to which it lends. But this insurance is not the only one. Based on your age, your risk profile (smoker, non-smoking, sport, civil servant, teacher...), you can find external insurance to the Bank which can be less expensive and require your banker that he accepts another insurance.

Borrower insurance premiums are highly variable from one institution to another, and the scope of the guarantees. Make that the choice of insurance tailored to your situation Calculator in hand!

Effective September 1, 2010, any candidate for a loan may freely choose his insurance. Article 21 of Act No. 2010-737 of July 1, 2010 on the reform of credit consumption prohibits banks to impose their borrower insurance contract. It also prohibits them from modulate the rate of credit interest (to increase) if the borrower chooses to foreign insurance. Finally, this new law requires banks to give reasons for any refusal of insurance other than the Bank's borrower.

Insurance guaranteeing housing loans are incomparable. Each insurance offers a feature to the competition. For example, the cover can be more or less extended. The base, the insurance may not cover death and disability, but more extensive coverage can take into account the temporary incapacity for work, i.e. a stoppage of work whose duration exceeds 60 or 90 days. Candidates borrowers have any interest to precise specifications. If the submitted specifications remain sealed, ask questions and do not hesitate to get re - explain the ins and outs of the proposed guarantees. To learn more about the borrower insurance, do not hesitate to read practical sheet carried out by the French Federation of insurance companies (FFSA) "The insurance of a loan" available real estate close to 8 out of 10 (78) made no competitive research at the level of the borrower insurance.

Three cases of species submitted to insurers (line, bankers and conventional insurance brokers). The three cases examined are the following:

1. Single young private, smoker, 28 years old who buys a small apartment and wants to borrow 120,000 euros in 20 years on loan at fixed rates, for his principal residence with a value of 140,000 euros notary fees.

2 Couple of non-smokers, respectively 41 and 43 officials, who borrows 50-50 (insured amount) for a period of 15 years total of 280,000 euros in loan fixed for a pavilion with a value of EUR 350 000 notary fees.

3 Couple, Mr practitioner 58 years in profession, Ms. Professor of 54 schools, both non-smokers, they take over 10 years in total 400,000 euros in loan fixed rate for their secondary residence 60 on Mr. 40 on Madam (insured amount) of a value of 500,000 euros notary.

The first question is that of the annual cost of the borrower insurance the first year of the loan in the three cases above.

Then, for the three cases above, we liked knowing the cost cumulative insurance at the end of the first 8 years in each case. Indeed, the average length of repayment of a loan is 8 years, either because the borrower repays the loan in advance, or generally, because it sells to buy housing greater than or located elsewhere.

Finally, always for the three cases above, we indicate the total cost of insurance in each case at the end of the loan, or, respectively, after 20 years, 15 years and 10 years.

We present the results of eleven insurers, bankers and brokers in the table below. We had interviewed 17 companies offering insurance borrowers, but some are being recast their rates following the enactment of the consumer credit Act, we will have the opportunity to re - examine later. We envision a new test bench on this subject in the last quarter of 2010.

Some brokers have websites allowing the candidates to the loan to obtain information and simulations on borrower insurance. Very developed, allows both to simulate, price and accept his choice borrower insurance contract online. In addition, this tool gives access to insurance for persons with aggravated risk of problems of health or advanced age. Indeed, the site allows the fully automated pré-constitution of medical formalities necessary for the study of the record. Pretassur automatically detects if the user is eligible or not in the convention AREAS (to ensure and borrow with an aggravated risk of health) to provide people with a health risk. If it is eligible, the service will automatically calculate the premium driven by this risk.

For the borrower, it is less expensive to cover the capital outstanding on the total initial capital borrowed. Insurance capital outstanding adjusts its cost with the remainder principal to repay while coverage on borrowed capital remains at the same level for the duration of the loan. Suppose that you borrowed 100,000 euros in the first place. If you choose an insurance on the total initial capital borrowed your insurance premium will be always calculated on 100,000 euros, even when you have more than 20,000 euros to repay. However, if you opt for insurance capital outstanding your contribution will be calculated at the outset on 100,000 euros, but on 20,000 euros then. On all of the years of insurance, insurance on the outstanding capital is more efficient than the borrowed total initial capital assurance.

While the amount of coverage decreases as the loan with insurance capital capital outstanding, the benefit of insurance on the initial borrowed capital, is to provide a constant amount of guarantee.

Rare are the bankers to offer the choice of pricing between total initial capital borrowed and capital outstanding.

The characteristics of the various insurance contracts borrower covering death and disability are very diverse. Also, is it necessary to examine the proposed contract guarantees to weigh its strengths and its weaknesses.

Borrower insurance is not neutral. For an elderly couple (status number 3), it represents an expenditure of the order of 30,000 euros over 10 years, or an average monthly cost of 250 euros.

Pricing differentials are enormous between insurers: in 20 years (case No. 1 for a young borrower), you will realize an economy of 9.372 euros between the cheapest and most expensive insurance borrowers, over 15 years (case No. 2 for a couple of 40 years) your economy will be 10.363 euros over 10 years (case No. 3 for a couple of more than 50 years)You can save 25.991 euros between insurance best suited and most expensive.

When one borrows should not only focus on the real estate credit rates. Other elements are equally important. The choice of insurance of the loan can enable big savings:

1. In doing so play competition, it is possible to achieve 20 to 60 savings on the total cost of loan insurance.

2 Comparing offers of loan insurance, can be found most powerful coverage at a price equal to or less.