The profile of the borrower, establishes the price of a loan insurance
These two criteria are the essential components of the rate of a borrower’s insurance: the older you are, the more you borrow a large amount, the higher the price of your insurance premium will be.
Depending on the risk represented by the profession performed by an insured person, the price will be more or less increased. Thus some profiles such as managers or TNS will be considered less risky profiles than employees and this will affect the pricing of ITT (Total Work Incapacity) and ITP (Partial Work Incapacity) guarantees.
In addition to this status (executive, non-executive etc ..), the profession will also be a criterion of increase or not the rate. Thus, it is important to qualify well at the time of accession to be certain to be covered in case of disaster: for example engineer will not suffice, it will be necessary to specify engineer in construction or sedentary engineer or mining engineer …
Certain professions such as the military, firefighters, people working in nuclear power plants or other professions called “at risk” will also affect the final price of loan insurance.
Activities related to the profession such as work at height (pruner for example) or heavy handling activities (which can induce disco-vertebral diseases) will also lead to increased premiums.
Lastly, professional travel abroad and by car are also criteria that can cause the price to go up or down. Thus a person spending the majority of his time abroad or doing 100 000 kms per year, does not have the same risks as a sedentary employee who will move only to come and go at his place of work.
Being a non-smoker will lower the price of credit insurance because the health risks of not smoking are lower than for smokers.
A person with pathologies for which he takes recurrent treatments (diabetes, cholesterol etc …) or people with so-called “dreaded” diseases (cancers, specific serologies ..) will be subject to surcharges or exclusions. For people in remission of certain dreaded diseases, the right to be forgotten is however a way that will allow them to limit surcharges in some cases.
Finally, a number of sports such as scuba diving, climbing, aerial sports (hang-gliding, microlight, parachuting, paragliding, bungee jumping …) can lead to a price increase. In this case, moreover, all the insurers will not cover all the sports (some contracts will exclude these risks and will not allow to buy them back) while those who agree to cover them (with a premium of “redemption”) will ask for additional information to properly assess the risk incurred.
In most insurance assignment agreements, the cost of your credit insurance varies every year depending on the principal remaining to be paid and your age. Thus the insurance rate is calculated at the fairest rate according to the age of the insured and applied to the capital remaining due each year, according to the depreciation schedule.
Thus, in insurance delegation contracts, it is not uncommon for the insurance premium to be stable, or even increase, during the first half of the loan term (because the value of the outstanding capital falls little during this period). period when the interest is refunded in large majority, but against your age evolves) to see it fall in the second part of the credit (where the capital decreases quickly, even if your age continues to increase).
The group contracts offer all borrowers an almost identical rate regardless of their profile and a constant premium calculated on the initial capital of the loan contracted.
Thus some people may have an interest in taking out this type of contract: older people, smokers, people practicing handling or working at height in their profession, people taking out a relay loan or with a big delay etc …
Conversely, if you are young, non-smoker, executive and you take out a short-term loan (10 or 15 years), the method of calculating this type of contract will put you at a disadvantage.
In any case, to make sure you make the right choice, compare the contracts to see which one is best for your profile. To quickly understand the savings you can achieve between the group contract offered by the bank and the insurance delegation contract that you plan to take, you must add all the insurance premiums collected over the entire duration of the credit and compare the totals thus obtained.
Other criteria relating to the price of loan insurance to take into account
A “guaranteed” rate is a rate defined at the time of the subscription of the contract and which can not increase. Thus, the amount of the contributions that an insured person will pay during the entire term of the contract can not be increased or because of changes in the life of the borrower (change of occupation, practice of an extreme sport, become a smoker. ..), nor because of criteria internal to the insurance company (bad technical results etc …)
But be careful, read the general conditions of sale because some cases may change up the amount of contributions to a contract with a tariff yet mentioned as “guaranteed” (if the borrower starts to smoke or if must travel regularly abroad for his work). In this case, do not forget to make a supplementary declaration when the event occurs so as to be covered in case of disaster!
As opposed to the “guaranteed” tariff, we are talking about a “revisable” tariff. In this case, the rate is likely to vary according to uncertainties concerning the borrower or the company. The revision can intervene following a change of profession, the technical results of the contract, the practice of sports at risk. On the other hand, if the state of health is one of the criteria determining the rate at the time of the subscription, it can never be revised because of a degradation of the state of health of the insured.
So prefer instead the contracts whose price is guaranteed, it will save you worries in case of a change of situation that you would have failed to declare and you will shelter from the rate increases that a company could do following a clean event concerning it.
Some contracts provide for exemption from paying contributions in the event of incapacity for work. In this case, the company reimburses the subscriber for the insurance premiums paid under the policy pro rata temporis of the period of incapacity for work, as of the end of the Franchise period.
This option does not usually cost too much in the contracts that allow it and can really be worth it in case of disaster.