Lump sum insurance loan insurance
Lump sum compensation paid by credit insurance means a full refund of the monthly installment of the credit by the insurer or the amount of which is determined in the contract. This type of care is generally offered by insurers during a delegation of insurance.
Flat-rate compensation is more advantageous than indemnity coverage, which takes into account the loss of income of the insured to compensate him.
More on a Lump sum
To take out a mortgage, you must also take out loan insurance. It offers you protection throughout the duration of the credit by providing support for the reimbursement of your monthly payments or capital remaining due in the event of death, accident, illness or unemployment. The initial guarantees of a borrower insurance contract are the death guarantee and the guarantee of Total and Irreversible Loss of Autonomy (PTIA). They are always requested by the lending institutions.
A loan insurance contract can offer two types of support:
- lump sum compensation
- indemnity compensation
The death and PTIA guarantees allow a total reimbursement by the insurer, depending on the insured portion (share of the insured capital). For the other guarantees of the borrower insurance contract, either lump sum compensation or indemnity compensation is involved.
The group insurance contract proposed by the banks allows the most often a compensation. This type of compensation is applied for the IPP (Partial Permanent Disability), IPT (Total Permanent Disability), ITT (Temporary and Total Incapacity of Work) and unemployment benefits, and allows a reimbursement by the insurer corresponding to the loss of borrower’s income. The insurer takes into consideration social benefits paid by other organizations (health insurance, etc.) to calculate the amount of compensation. If the benefits cover the entire loss of income of the borrower, the insurer does not make any repayment of the monthly installments of the credit.
It is therefore more interesting to benefit from a lump sum coverage, offered by individual insurance contracts in the context of a delegation of insurance which, remember, is the fact of subscribing its loan insurance from insurer of his choice, outside the lending institution.
The word of the broker
Before taking out an insurance contract, take the time to compare different offers with the contract offered by your bank, and become familiar with the conditions of these to choose the insurance borrower who will be the most advantageous.