When you want to do work in your house or apartment and you don’t have the means, you can take out a work credit. The amount of the credit can change depending on the work you plan to do and the duration is also variable. Repayment can range from 6 months to 12 years. To give you this type of credit, the banker can ask you to subscribe to work loan insurance. For this file, we will focus on work credit insurance.
Why take work credit insurance?
Credit insurance, also called loan insurance, is insurance that the banker may require when you take out a loan. For work credit, we speak of work credit insurance. Its name is indeed « loan insurance », but it is up to the borrower to take it against the risk of non-payment with the banking establishment, in the event of disability, incapacity or even death. . Indeed, it is the banker who is the beneficiary of the contract. On the other hand, we can also see this work credit insurance as protection for the borrower and for his family. If one day you can no longer repay the monthly payments to the bank, the debt will not be passed on to your relatives or your heirs. This insurance will cover you, if you die or if you lose your autonomy or your work validity.
The subscription to this insurance, is it mandatory?
In the request for certain types of credit, loan insurance is compulsory to ensure the bank of repayment (source). In the case of a work credit, this is not compulsory. When you do an online loan simulation, you may be automatically suggested different insurances, but you are not obliged to take it at all.
There are exceptional cases where certain establishments require this insurance and offer it directly. The recommended type of contract provides the borrower with coverage in the event of death or disability.
Guarantees in a credit insurance contract
Whether it is mortgage loan insurance or work insurance, the insurer can quote the guarantee against the risk of death, total or irreversible loss of autonomy, total or partial permanent disability, temporary total incapacity for work or partial or loss of employment. It is important to fully understand the clauses of your works credit insurance to avoid any confusion and in order to have better coverage.
The death guarantee, for example, is often present in any type of credit insurance contract, but the age limit of the guarantee is not always the same. This means that the cover can end before the term of the loan. In the clauses of the loss of autonomy, there is also an age limit and if it comes before this age, you will benefit from coverage. The disability guarantee is not offered in the basic contracts and is displayed as an option. If you insist on having this guarantee, you must check the percentage of incapacity to obtain financial assistance from the insurer.
Take work credit insurance with the bank or an insurance company
When you do the work credit simulation on the site of a credit agency, you can be offered borrower insurance directly. You will find in the standardized information sheet the guarantees on credit insurance with its cost. If you need guarantees displayed as an option, the banker can give you a more personalized form. It is also possible to take it from an insurance company.
For the choice between the insurance offered by the banking institution and that by the insurance company, you are free to decide which one suits you. You must base yourself on the cost, but also on the guarantees and the extent of the covers.
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