Mortgage loan: The difference between lump sum and indemnity insurance

Real estate loan insurance

Real estate loan insurance

 Ask yourself the question: What difference then between a indemnity contract and a lump sum contract?

Disability and disability guarantees

Disability and disability guarantees

After the death guarantee and the PTIA guarantee (total and irreversible loss of autonomy), the second inseparable from the first, intervene other guarantees invalidity and incapacity in case of sickness or accident:

IPT guarantee: total permanent disability when the insured person, after a consolidation of his condition, has a disability rate greater than or equal to 66%

ITT guarantee: total temporary incapacity when the insured can not, as a result of an accident or illness guaranteed in the contract, practice his profession or any other that might give him income

IPP guarantee: partial permanent disability when the insured person, after the consolidation of his state, a disability rate greater than or equal to 33% and less than 66%. This guarantee is not always offered by insurers.

When one of these situations arises, two modes of support are possible: indemnity or lump sum. These two concepts are of crucial importance because one is clearly more advantageous than the other.

Compensation contract

Real estate loan insurance

In an indemnity contract, the reimbursement received in the event of a claim is proportional to the decrease in income. If, as a result of an accident, your income decreases by 30%, the guarantee will only be used for this loss. In the event that you receive social benefits that compensate for this decline in income, the insurer does not take care of anything.

The reimbursement of indemnity is mainly proposed in the bank group contracts. We must compare because the alternative offers are more protective when they provide a lump sum refund.

Lump sum contract

The compensation is not in this case, calculated based on the loss of income, but fixed at the signing of the contract. If the contract provides for full coverage of the monthly payment, the insurer will cover the amounts provided independently of any benefits paid elsewhere.

This difference in repayment is paramount, it characterizes the importance of comparing contracts and not stopping at the price, guarantees and exclusions of your contract are paramount. First the guarantees, then comes the price. In the case of an application for a delegation of insurance, it is subject to the equivalence of guarantees. A bank can not refuse an external contract if it has a level of guarantee at least equivalent to that of its group contract. With equal guarantees, delegated insurance can be much cheaper than bank insurance, in particular by the calculation logic, or on the capital borrowed, or on the capital remaining due.


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