In the event of death or incapacity for work, it happens that a maturity of the mortgage is not always taken care of. This can lead to financial hardship for the borrower.
The magazine 60 Million consumers has just devoted a long investigation to these insurances that we sometimes take out, which we call borrower’s insurance. That is to say that during a death, during an incapacity for work, it happens that a maturity of a mortgage is not supported. Lionel Mauguin, section editor for banking, finance, insurance, real estate, in the magazine,signs a file on these insurances. And some of them aren’t much use in the end.
franceinfo: Lionel, are these insurances useful?
Lionel Maugain: Yes, then these are insurances that you take out when you borrow for a mortgage. And very often, we talk about bringing competition into play, but we rarely talk about the contract itself: what it includes, what it doesn’t. These are contracts that cover you against death, disability, inability to work. And we realized while deciphering them, that was not always the case, because there were a lot of exclusions. Amazing things from insurers.
We must first look at the conception of the word accident, which is not necessarily the same for everyone?
Yes, so in our own world, we open the Larousse, then we read that an accident is a fortuitous event, which has more or less damaging effects for people or for things. But with insurers, it’s something else.
For example, if you fall down the stairs, the insurer considers it a careless error on your part. And as in its definition, there must be an external cause to qualify the accident, it will not support it, if you become disabled as a result of this fall. So you see the difference in terminology, between the real world and the insurance world.
One observation among all the cases you have identified, that of incapacity for work. So there, it’s really an obstacle course for an employee who is in this case. And things get very slow and very long?
Yes so first, when you are unable to work, and you need to pay your credit due date, there is already a deductible which generally lasts 90 days. It is the average duration of maintenance of the salary, in the private sector or in the public sector. But in some contracts, we can see that insurers can extend this period from 120 to 180 days, which makes six months.
Then, you should know that the difference between the salary before the stop, and the benefits received, therefore the amount compensated is lower than that of a benefit in monthly payments, and therefore you will not have your entire salary, if you measure the difference between the remuneration and the maturity of the credit.
And we can even end up without any support?
Yes, because temporary incapacity for work generally lasts three years. At the end of three years, the insurers consider that it is necessary to know if you are still in temporary or if you become invalid. However, to qualify for disability, your condition must be consolidated and therefore in general, it is not before five years. So what we see is that some policyholders are compensated for three years, and after three years they are no longer, because they are not considered disabled. And so there may be a hole, and we will no longer be compensated between three and five years.
The job loss guarantee, the insurers offer it to you every time. It is an option. Is it effective?
So it only concerns employees on permanent contracts, and it only comes into play in the event of dismissal covered by Pôle emploi. So really, it’s limiting. In addition, it is not granted to people over 50, and in addition, you really have to wait. If this ever happens to you, there is a waiting period which varies from 3 to 12 months and again, a deductible during which you cannot receive your compensation corresponding to the expiry of your credit.
It is often said Lionel Mauguin that the devil is in the details. So there, in terms of insurance, we are right in the middle of it. Tell us about vaping?
Yes, so that’s a detail that we noticed in all the contracts. It’s that you are always asked, when you take out a loan, mortgage insurance, whether you smoke or not. So, it’s pretty clear, except that in all the contracts, in the term smoking, we also imply vaping.
So you can totally vape, and not declare it in good faith, because you don’t smoke. And then we know that there is still a difference in the state of health when you smoke or when you vape. It’s infinitely more annoying when you smoke than when you vape. So these are petty little things from insurers.
What advice would you give us before signing a contract?
Don’t just rely on the competition. Do not necessarily take the cheapest one, but take a good look at all the lines. Take a good look at the coverage rates as well. Then after, do not hesitate to also solicit insurance brokers who can offer equivalent contracts. But in any case, it is necessary to read well. It’s not just a matter of competition. You have to see how you will be covered in the event of misfortune.