Real estate insurance reassures the lending institution as much as it secures the borrower. Indeed, in case of any problem of any kind, the bank wants to ensure that it will be reimbursed the loan it is about to grant. But for those who subscribe a credit, the guarantees offered in the home loan insurance will get out of the rut in case of accident of life: the proof by three.
1. The death guarantee
If the individual holder of the credit dies while the entirety has not yet been repaid, the death cover (DC) of the borrower insurance guarantees the payment of the remaining capital. This guarantee is associated with another risk: the total and irreversible loss of autonomy (PTIA). According to insurance organizations, certain conditions may vary: suicide or the practice of sports considered “at risk” are not always taken into account as well. Moreover, when a loan is contracted between several borrowers, only the dependent part of the deceased person is reimbursed, according to the proportion.
2. Invalidity or incapacity for work
A serious accident can cause serious consequences such as permanent disability or partial or total disability that prevents the injured person from returning to work. Mortgage insurance also covers this type of risk and in the same way as for death. Nevertheless, in the event of partial disability, the guarantee may include clauses that vary according to the organization, so it is important to carefully check the different degrees of disability covered, the duration and extent of care.
3. The job loss guarantee
As unemployment is a long-term problem in modern societies, banks have also wanted to protect themselves in case of job loss. Thus, if an individual is unemployed, mortgage insurance will also support the repayment of the loan. But this third guarantee is not always offered and generally concerns borrowers who are on permanent contracts. A resignation or retirement does not fall under the conditions of this loss of employment guarantee.