Changing the borrower’s insurance may allow you to split the account by 2 or 3

At the beginning we were very happy with the arrival of the Lemoine law, which freed the market “, assures Patrick Bacchetta, boss of the brokerage firm Wedou Asuurances, referring to the new possibility of changing the borrower’s insurance at any time (the famous disability guarantee for death), without having to wait for the anniversary of the subscription as was the rule before. “It was unfortunately accompanied by the abolition of the health questionnaire, which has increased the cost of this coverage for many customers”, he adds immediately.

But let’s first study the positive side of the law, the first part of which, which entered into force on September 1 (and June 1 for newly signed loans), allows you to withdraw from the contract simply by sending a registered letter, without notice and at no cost, in favor of a cheaper offer. “With us, insurance exchange requests immediately quadrupled”, explains Astrid Cousin, spokesperson for the specialized broker Magnolia.fr. It must be said that the gains obtained can be substantial.

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Take the example of a 30-year-old non-smoker who borrows $ 200,000 in twenty-five years. If he keeps his bank’s insurance, it will cost him a total of € 18,750 in premiums (€ 65.50 per month). If you switch to Axeria premium, one of the best offers of the moment for his profile, the account will drop to 4,010 euros (13 euros per month). This is a total saving of € 14,740.

Of course, the longer it takes to change insurer (we talk about insurance “delegation”), the lower the gain, as shown in our table: for a non-smoking executive, who took out the loan at 23, making the change aa 30 years old will earn him 7,880 euros, compared to 10,000 euros if he had subscribed to Generali’s offer from the start. The age of the borrower is also a parameter to consider before deciding, knowing that the younger you are, the more profitable it is.

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It is well known that the insurance contracts of banking institutions are based on the pooling of risks: everyone pays more or less the same price, regardless of age. “After 35 years, their proposals are often very close,” confirms Astrid Cousin. While delegating your insurance to a company specializing in this niche, such as Safi, Sphéria Vie or SpeedOne, you switch to so-called “individualized” risk contracts. The price is à la carte, and depends in particular on its age. Perfect for those in their twenties and thirties, who, even if they are non-smokers, can get insurance rates below 0.10%. But disappointing for those over 40 or 45, with two or three times higher payouts, which will therefore pocket much less earnings.

Last point to note: some contracts, with contributions calculated on the residual capital (amount that decreases after each repayment date), require you to pay much more in the first years than in the last. If so, proceeding with an insurance proxy quickly loses its interest. “At the same cost, it is better to opt from the beginning for a pricing calculated on the initial borrowed capital, with fixed monthly installments on all the credit,” advises Xavier Prin, marketing director of Boursorama.

The savings expected from an insurance contract change

For a loan of € 250,000 repayable over 20 years. (2) Not relevant: The borrower was too young 15 years ago to be able to take out a loan. Source: Magnolia.fr © Capital

The second part of the law it concerns the abolition of the medical questionnaire for loans of less than or equal to 200,000 euros (assuming they are repaid before the age of 60). This is great news for health-conscious customers who have so far been placed in the high-risk category and to whom companies have either rejected insurance or high premiums. Let’s take the previous example of this 30-year-old executive, who has borrowed € 200,000 in 25 years, and suppose he is diabetic …

Thanks to the Lemoine law, his borrower insurance will always cost him 4,010 euros. Previously, his illness would have been taken into account, and his insurance would have been 150% more expensive, up to 10,025 euros. Worse, at this price, the guarantees of invalidity and incapacity for work would not have been included, although almost indispensable.

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However, ending the health questionnaire is not beneficial for everyone. In fact, bankers and insurers, prevented in this way from accurately measuring the risk incurred, have decided to hedge themselves by increasing prices. “The increase reaches 40% for some profiles”, warns Patrick Bacchetta. This additional cost, in itself problematic, is all the more penalizing as it sometimes leads the all-inclusive rate of the loan to cross the usury threshold (set from October at 3.05% for over twenty-year-old loans, and 3.03% for loans shorter maturities), beyond which banks no longer have the right to grant loans. This is how very acceptable profiles are now unable to finance themselves!

Of course, let’s say at first glance, these situations only concern loans of less than 200,000 euros. Except that this sum is established per capita, and therefore doubles in the case of a pair of borrowers, to rise to 400,000 euros. That is, in the end, a large part of the loans requested.

If you are stuck in this way, know that there is a way to achieve your goals. Especially if you are looking for a buy in the old, with work. If you do not suffer from any pathology, it becomes interesting to pass your overall budget beyond the famous 200,000 euros per capita loan. Illustration with this 32-year-old employee, in excellent shape, who wants to afford an apartment exhibited at 199,000 euros.

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If he buys it at this price, with a credit of more than twenty-five years, he will avoid any medical questionnaire, and will get insurance of around 0.13%, which will cost him about 6,560 euros (22 euros per month). But if the loan increases to € 201,000, including a repair budget, the insurer, reassured by the health questionnaire, will only request a rate of 0.08%. Or 3,830 euros. And a final gain of 730 euros (6,560 – 3,830 – 2,000 euros of capital borrowed in addition).

Finally, a word on a less exposed aspect of the Lemoine law, but still crucial for those concerned: the reduction of the right to be forgotten, thanks to which former cancer and hepatitis C patients no longer have the obligation, whatever the amount borrowed, to declare your illness to the insurer five years after the end of the treatment (compared to ten years earlier). Advantages: less refusal to pay insurance for serious illness and fewer guarantees in the event of death and disability.

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