Required by banks to cover the risks likely to prevent the repayment of the loan in the event of death, disability or incapacity to work, the insurance is generally taken out with the lending bank, in the form of a group contract.
These contracts are based on a shared pricingpoorly suited to individual profiles, with rates generally between 0.25% and 0.40% of the borrowed capital.
Freedom of termination favorable to savings
Long supervised, the possibility of change insurance has softened considerably. Since the entry into force of the Lemoine law in 2022termination is possible at any time, without costs or penalties, subject to presenting a contract offering guarantees equivalent to those required by the bank. This increased freedom allows competition more efficient insurers. Individual contracts offered by alternative insurers are based on personalized pricing, taking into account age, profession or state of health. For profiles less exposed to risk, rates can thus fall below 0.15%, creating a significant gap with bank contracts.
There renegotiation of theborrower insurance involves bringing together the loan offer and its amortization table, the current insurance contract as well as the standardized information sheet (FIS). The request must be supplemented by the proposal from the new insurer and its certificate of equivalence of guarantees. The bank then has ten working days to decide. This competition may also lead it to review the conditions of the existing insurance.
A concrete impact on the total cost of credit
THE potential savings mainly depend on the outstanding capital and the residual duration of the loan. On a real estate loan of 250,000 euros contracted over twenty yearsthe total cost of insurance may exceed 25,000 euros. A renegotiation during the loan can save hundreds of euros per year and several thousand over the entire repayment period, without changing the credit conditions.
Furthermore, unlike banking contracts indexed on the initial capital, many alternative insurance policies are calculated on the remaining capital, resulting in a gradual reduction in cost over the course of repayments. Adjusting the ratios between co-borrowers or removing less relevant optional guarantees can reinforce these gains. So many levers which explain why the renegotiation of borrower insurance stands out as a financial optimization tool in its own right.
