By Charlotte Beydon 14 June 2022
By imposing it, the banks guarantee themselves to be compensated in the event of disability, incapacity or death. This coverage often has high costs. Fortunately, with the Lemoine Act of 28 February 2022, it will be easier to change the borrower’s insurance. To find out more about the measures that have been implemented, it is in the first part of this article.
Concretely, the steps to sign a new contract are simple. After comparing the various proposals and choosing the most suitable oneis it necessary to mount a file.
A delegation letter must then be sent to the bank. Finally, it will be necessary to wait about ten days to receive the latter’s decision and terminate the old contract. We describe all this in the second part of this article.
To find out all about the change in mortgage insurance, the measures of the Lemoine Act, the steps to take, as well as to consult our standard letter to send to your bank, continue reading this article.
Mortgage insurance change: changes in 2022
The adoption of The Lemoine Act of 28 February 2022 is accompanied sweeping changes to mortgage insurance for consumers. Focus on these simplification measures!
Option to change borrower insurance at any time
Before the Lemoine Act, it was difficult to change borrower insurance. Take effect, a certain time had to be respected very precisely according to the date of signing the contract. During the first year of the loan, it was of course possible to withdraw at any time, but after that it was imperative to wait for the anniversary to send your delegation letter.
From now on, it will be possible to cancel your engagement at any time. :
- From 1ehJune 2022 for new home loans;
- From 1ehSeptember 2022 for current contracts.
This new right and the methods of implementation will have to are explained and elaborated by the insurance companies. It is a legal obligation imposed on them.
Please note, if it is now possible to change borrower insurance at any time, this is a fact the bank can always oppose it. Of course, the bank must then justify its decision with a legitimate reason, the most common of which is lack of equivalence of the guarantees between the old and the new contract.
The end of the health questionnaire under certain conditions
All borrowers had to comply the necessity of the health questionnaire. Intrusive and discriminatory, it is disappearing today.
Actually from 1eh 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 repayment of the said loan is planned before the 60theBorrower’s birthday.
With this measure, future policyholders are considered “at risk” for health reasons no longer have to bear a voluntary increase in their contribution or different and varied exclusions.
The period of the right to be forgotten greatly reduced
Directly linked to the health questionnaire is the right to be forgotten failure to declare a pathology to its future insurance company after a certain period the course since the end of the therapeutic protocol. It is especially used for people who have had cancer.
Earlier, this period was 10 years. Former patients had to report their health problem during the 10 years after their remission and therefore received additional premiums and exclusions from coverage. With Lemoine’s law, this period is increased to 5 years and will be extended to people who have contracted hepatitis C.
Per 31 July 2022, it is agreed that the signatories of The Aeras Convention will have signed an additional agreement so that other diseases are also covered. The additional premiums will also be better monitored, or even completely eliminated. Finally, the loan ceiling will be reassessed.
There are several advantages to switching borrowers’ insurance. Closer to your needs, more adapted to your current situation and state of health, more economical… By taking out a new home loan insurance with another insurance company, you have a lot to gain. Here’s how you do it.
1. Compare mortgage insurance
Before you jump headlong into choosing a new insurance company, keep in mind that price should never be your only criterion. It is also important to take into account the extent of the guarantees offered. And with good reason, it is an indispensable condition for your bank to accept this termination: your new contract must provide the same level of guarantee as the old one.
To do this, You can rely on the standardized information sheet (FSI), which describes the criteria used and the minimum guarantees that the bank requires to insure your mortgage loan. This last one was for you discount from the first simulation of your credit. If this is not the case, do not hesitate to contact your bank to receive it. It will serve as a basis for comparing the various proposals.
Other criteria to keep in mind : warranty exclusions, but also the quality of customer service. Also watch out for contracts whose premium can be revised and which can lead to unpleasant surprises.
To simplify your life, the use of a home loan insurance comparator such as Magnolia. then can be useful as you will receive personalized offers based on your profile with just a few clicks.
Once your choice is made, you will need to start preparing your file.
2. Prepare your file with all the documents to be provided
The file to change borrower insurance is slightly different from the one you created when you applied for a mortgage.
Although each insurance company has its own terms and conditions, here are the most important documents you need 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 insurance company will thus be aware of the size, duration and rate of your loan.
- The dated installment table: In this way, the new insurance company will be able to know where you stand in the repayment of your loan and determine monthly payments as precisely as possible in relation to the capital you still have to pay.
- The health questionnaire (if you don’t meet the new criteria that allow you to avoid it): This form consists of 14 simple questions and this form allows your new insurance company to take stock of your state of health and know your level of “risk” with consideration for repayment. Your personal and family history must be detailed (cancer, diabetes, hereditary disease, work stoppages, etc.), as well as any current treatments.
- A copy of the FSI (Standardized Information Sheet): you must have received it during your first loan simulation. It states for the new insurance company all guarantees and insurance conditions for your bank, so that it can offer you equivalent coverage.
3. Termination of borrower’s insurance by using a standard letter
Have you received your new insurance contract? Iit’s about time 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 an example of a letter :
[Nom et Prénom]
[Code postal et ville]
[Nom de l’assureur]
[Code postal et ville]
To [Lieu]that [Date]
Reference: Insurance contract no. [numéro de contrat]
Subject: Request for termination of my borrower’s insurance agreement
Hereby, and as authorized by the Lemoine Act of 28 February 2022, I am informing you of my wish to terminate the mortgage insurance contract no. [numéro de contrat] subscribes with your company to [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 be effective as of [date].
Knowing the essential nature of insurance to cover my mortgage, I chose a new borrower’s insurance policy with similar guarantees. You will attach the lender’s agreement regarding this delegation and the validation of this new contract.
Thank you in advance for confirming that my request has been considered, as well as for your attention to my matter.
Please accept, madam, sir, the expressions of my distinguished sentiments.
4. Wait for your bank’s response
The bank has no no obligation to validate your request to switch borrower insuranceshe has every right to oppose it if justified.
In any case, your post will not remain a dead letter: the bank has a deadline of 10 working days to tell you about their decision.
- If she refuses: this decision must be imperative be entitled indicating missing or non-equivalent information and/or guarantees. Your original insurance contract will not be canceled and will remain active until you submit a new application.
- If she agrees: the bank sends you a supplement to the loan offer. She walks recalculate the total effective interest rate on your loan, the latter no longer includes insurance costs. Note: it does not have the right to change the original interest rate on the loan (whether fixed or variable) to compensate for the shortfall or the conditions set out in your offer. It also cannot charge amendment fees, analysis fees or delegation fees.
A question to ask? A problem to travel? An entire community at your service…
📆 When can you change borrower insurance?
❓ How do you change insurance under a home loan?
- Compare insurance policies and proposals;
- Complete the file and submit the necessary supporting documents;
- Send a letter of delegation to his bank;
- Read more
📰 What documents are required for changing mortgage insurance?
- A copy of the loan offer
- A recent depreciation schedule
- A health questionnaire
- Read more
🤔 Can the bank refuse to terminate my borrower’s insurance?
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