The financial institution that sets up your consumer credit will often encourage you to buy insurance. However, legally, you do not have to take out insurance for your consumer credit.
Moreover, if you want to obtain insurance for your consumer loan, know that you can quite buy it from another establishment.
What are the risks to be insured?
As a general rule for credits, there are two types of insurance, those that cover you against the risks of death, disability, and illness. And those who insure you against all these risks, and the risk of unemployment.
With death insurance; if you die before having completed the repayment of your loan, the insurance company will replace you for the repayment of the outstanding capital. So the debt contracted through this credit would not enter into your estate estate.
With disability insurance, if you had a disability, your insurer would reimburse the financial institution that gave you the credit. However, very often the disability must be total and definitive.
As for health insurance, when your work stoppage is recognized by the health insurance, the insurer replaces you for the refund of your credit.
Finally, you can also take out job loss insurance, but only if your employment contract is for an indefinite period. Be careful, you will not be compensated in case of dismissal for fault, resignation … In addition, be aware that your insurer will surely apply a waiting period.
Should one ensure one’s credit for consumption?
The amount of your insurance premiums will represent a fraction of the borrowed capital. Since the amount of a consumer credit varies from € 200 to € 75,000, the amount of your loan and its duration are factors to consider, as well as the risk taking that you consider acceptable.
Also, when you borrow a small amount over a relatively short period of time, you do not really have an interest in taking out insurance. But when the amount borrowed is large enough, and your credit spread over several years, insurance makes sense.
How to choose your insurer?
From now on, the insurance professionals have an obligation to clearly indicate their rates, so that the consumer can compare the different proposals he receives. Know that you have every interest in the competition, you can make great savings because the rates can easily go single or double.
Finally, know that you can change your mind throughout the life of your credit, because now the law allows consumers to change insurance each year. You only need to follow the procedure. Be aware that although insurance is not mandatory, some financial organizations will refuse to give you credit if you do not buy insurance.