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Changing the borrower’s insurance may allow you to divide the bill by 2 or 3

At the beginning, we were very happy about the arrival of the Lemoine law, which freed up the market”, assures Patrick Bacchetta, head of the brokerage firm Wedou Asurances, referring to the new possibility to change borrower insurance at any time. famous death-disability guarantee), without having to wait for the anniversary of the subscription, as was the rule previously. “Unfortunately, it was accompanied by the abolition of the health questionnaire, which caused the cost of this coverage to jump for many customers,” he immediately adds.

But first let’s study the positive side of the law, the first part of which, which came into force on September 1 (and June 1 for newly signed loans), allows you to cancel your contract by simply sending a registered letter , without notice and without cost, in favor of a cheaper offer. “With us, requests for changes to insurance immediately quadrupled,” explains Astrid Cousin, spokesperson for the specialist broker Magnolia.fr. It must be said that the gains made can be significant.

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Take the example of a 30-year-old non-smoker who borrows €200,000 over 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 he switches to Axeria premium, one of the best offers at the moment for his profile, his bill will drop to 4,010 euros (13 euros per month). This is a total saving of 14,740 euros.

The longer it takes to switch insurance companies (we’re talking about “delegating” insurance), the lower the gain, as our table shows: For a non-smoking executive who took out his loan at 23, the switch serves at 30 years will give him 7,880 euros, against 10,000 euros if he had subscribed to Generali’s offer from the start. The age of the borrower is also a parameter to take into account before deciding, knowing that the younger you are, the more profitable it is.

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The banking institutions’ insurance contracts, it should be known, are based on the pooling of risks: everyone pays roughly the same price, regardless of age. “After 35 years, their proposals are often very close,” confirms Astrid Cousin. Whereas by delegating your insurance to a company specialized in this niche, such as Safi, Sphéria Vie or SpeedOne, you switch to so-called “individualized” risk contracts. The price is then à la carte, and depends mainly on his age. Perfect for twenty-somethings and thirty-somethings who, if they’re also non-smokers, can get insurance rates as low as 0.10%. But disappointingly for those over 40 or 45, at the premium two or three times higher, who will therefore pocket much smaller winnings.

Last point to note: some contracts, with contributions calculated on the remaining capital (an amount that decreases after each repayment date), require you to pay much more in the first years than in the last. In such a case, proceeding with a delegation of insurance quickly loses its interest. “For a similar price, it is better from the start to choose pricing calculated on the borrowed initial capital with fixed monthly payments throughout the credit”, advises Xavier Prin, Marketing Director of Boursorama.

The savings that can be expected by changing the insurance contract

For a loan of 250,000 euros to be repaid 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

Second part of the law concerns the abolition of the medical questionnaire for loans below or equal to 200,000 euros (provided they are repaid before age 60). This is excellent news for customers with failing health, who have so far found themselves placed in the high-risk category, and for whom companies have either refused to insure or offered high premiums. Let’s take the earlier example with this 30 year old executive who borrowed 200,000 euros over 25 years and suppose he is diabetic…

Thanks to the Lemoine law, his loaner’s insurance will always cost him 4,010 euros. Whereas previously his illness would have been taken into account and his insurance would have been 150% more expensive, to reach €10,025. Worse, at this price, the guarantees for disability and incapacity, however nearly essential, would not be included.

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But the end of the health questionnaire is not beneficial for everyone. Banks and insurance companies, which in this way are prevented from measuring the incurred risk precisely, have decided to cover themselves by raising their prices. “The increase reaches 40% for certain profiles”, warns Patrick Bacchetta. This additional cost, problematic in itself, is all the more punishing as it sometimes leads the all-in loan rate to cross the threshold for attrition (fixed since October at 3.05% for loans over twenty years, and 3 .03% for shorter maturities), beyond which banks no longer have the right to lend. This is how very acceptable profiles are now unable to fund themselves!

Admittedly, we say at first glance, these situations only concern loans of less than 200,000 euros. Apart from the fact that this sum is fixed per per capita, and therefore doubles in the case of a few borrowers, to rise to 400,000 euros. That means, in the end, a good part of the loans that are requested.

If you are stuck this way, know that there is a way to achieve your goals. Especially if you are looking for a purchase in the old, with work. If you do not suffer from any pathology, it will actually be interesting to send its total budget beyond the famous 200,000 euros in loans per inhabitant. Illustration with this 32-year-old employee, in good shape, who will be able to afford an apartment on display at 199,000 euros.

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

Finally, a word about a less exposed aspect of the Lemoine law, which is nevertheless crucial for the persons affected: the reduction of the right to be forgotten, thanks to which former cancer and hepatitis C patients no longer have the obligation , regardless of the amount borrowed, to declare their pathology to the insurance company five years after the end of treatment (against ten years earlier). Advantages: less refusal to insure due to serious illness and cheaper death and disability guarantees.

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