What is borrower’s insurance?

Borrower’s insurance is essential protection for a mortgage. It guarantees total or partial coverage of loan repayment in case of unforeseen events: death, disability, incapacity to work, or even job loss. Although not legally mandatory, it is systematically required by banks to secure financing. Here’s everything you need to know.

1. What is the purpose of borrower’s insurance?

Borrower’s insurance protects:

• The bank, by guaranteeing the repayment of the remaining capital due
• You and your loved ones, by avoiding a financial burden in case of life’s accidents

It therefore secures the loan in case of major unforeseen events.

2. The main guarantees

Borrower’s insurance generally includes several guarantees:

• Death: repayment of the remaining capital due
• Total and irreversible loss of autonomy (TILA)
• Temporary incapacity for work (TIW)
• Partial or total permanent disability (PPD/TPD)
• Job loss (optional)

The level of coverage may vary depending on the contracts and insurers.

3. Insurance delegation: are you free to choose?

Yes. Since the Lagarde law and the Lemoine law, you have the freedom to take out your borrower’s insurance with the insurer of your choice, as long as the level of guarantee is equivalent to that required by the bank.

This insurance delegation often allows for significant savings, sometimes up to several thousand euros over the duration of the loan.

4. How is the cost of insurance calculated?

The cost depends on several criteria:

• Your age
• Your health condition (medical questionnaire)
• The amount and duration of the loan
• The subscribed guarantees
• The type of pricing: on initial capital or remaining capital due

It is therefore essential to compare offers and simulate several scenarios.

Domacap helps you choose the right insurance

At Domacap, we compare the best borrower’s insurance on the market for you, based on your profile, your project, and your bank’s requirements. We help you choose optimal coverage, at the best cost, without compromising your security or that of your loved ones.

Conclusion

Borrower’s insurance is an essential pillar of your real estate financing. When well-chosen, it effectively protects you while controlling your monthly payments. With Domacap’s support, you have the assurance of a contract tailored to your needs and validated by your bank.