Consumer credit: borrower's insurance

Verified 13 March 2025 - Directorate for Legal and Administrative Information (Prime Minister)

Borrower insurance is not required for consumer credit. However, the lender may require you to take it before giving you the credit. This insurance protects you against financial risks related to death and disability. If you have problems finding insurance because of health problems, you can use the agreement AerasAeras : Insurance and Borrowing with an Aggravated Health Risk. We present you with the information you need to know.

Consumer credit insurance typically covers the following risks:

  • Death : In such cases, the insurance will cover the reimbursement of the credit to protect your heirs.
  • Sickness and disability : if you are unable to work for health reasons, the insurance can cover all or part of your monthly payments.
  • Loss of employment : in case of involuntary unemployment, the insurance can also cover your monthly payments under certain conditions.

However, some events may not be covered by the contract. It is therefore important to check the guarantee exclusions before subscribing.

General rule

The insurer has the right to ask you to fill out a medical questionnaire, if you subscribe to insurance that covers health risks (sickness, disability, death). This questionnaire must be filled in in good faith.

Any omission or misrepresentation may lead to the blocking of the guarantees, or even the cancelation of the contract, in case of bad faith.

The insurer reviews your questionnaire responses and assesses the risk to be covered.

Persons presenting "aggravated risks"

People who have or have had serious health problems are generally considered to have aggravated risks by insurance.

However, if you are in this case, you can benefit from the Aeras Convention. In particular, this agreement allows you not to fill out a medical health questionnaire.

Often, the institution that gives you the consumer credit sends you an insurance proposal along with the loan offer.

Insurance is not legally required for consumer credit. However, some lenders may require you to purchase insurance as a condition of the loan.

If you take out insurance when it's not required by the lender, you can choose the contract that best covers you. You have to compare your lender's proposal with those in the market. Insurers are required to clearly indicate in their advertisements and contracts the factors which make it possible to assess the cost of their services.

Warning  

Be vigilant about the guarantees offered, the exclusions, the waiting periods and the conditions of care mentioned in the contract.

The insurer must send you an insurance proposal that includes the following:

  • Guarantees for which it grants cover
  • Eligibility requirements
  • Exclusions
  • The amount of the monthly contribution over the total duration of the loan.

The contract shall be concluded by the signature of the insurance proposal.

Payment of the contribution must be made at the time of signature of the prior offer of credit, unless otherwise specified indicating payment on 1er unfreezing of funds, for example.

Once the contract is concluded, the insurer provides you with an insurance certificate to be sent to the credit institution to validate your file.

The situation varies depending on whether the insurance is optional or compulsory:

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Optional insurance

You can terminate the contract at any time of the year.

The insurer is required to send you an annual information notice reminding you that you have the right to terminate the contract.

The Information Notice must specify the contract expiration date and the deadline by which you can submit a termination request.

This notice should at least come to you 15 calendar days before the deadline by which you can request termination of the contract.

You must send your cancelation letter to the insurer at least 2 months before the due date.

But if the insurer has not sent you any information notice, you can request the termination of the contract at any time after the expiry, without penalty.

The cancelation request must be sent to your insurer by one of the following means:

  • Online if the contract has been signed online or if, at the time of termination, the insurer offers online subscription
  • Paper Letter
  • On-site declaration at the insurer's head office or at the insurer's representative's place of business (general agent, broker)
  • Extrajudicial Act (via a Commissioner of Justice)
  • Remote communication mode, when the contract has been concluded by this means (mail, telephone, etc.)
  • Any other means provided for in the contract.

Compulsory insurance

If borrower insurance was a condition of the credit, you cannot terminate it and remain uninsured.

But you can cancel the lender's borrower insurance if you replace it with insurance that offers equivalent guarantees.

If the lender wishes to object to the termination, it must send you an explicit decision of refusal which includes the full reasons for the refusal and which specifies the information and guarantees missing in the new contract.

The cancelation request must be sent to your insurer by one of the following means:

  • Online if the contract has been signed online or if, at the time of termination, the insurer offers online subscription
  • Paper Letter
  • On-site declaration at the insurer's head office or at the insurer's representative's place of business (general agent, broker)
  • Extrajudicial act (via a Commissioner of Justice)
  • Remote communication mode, when the contract has been concluded by this means (mail, telephone, etc.)
  • Any other means provided for in the contract.

If an event covered by the insurance occurs, you must declare it to the insurer within the period indicated in the contract (in principle 30 days) and provide him with the necessary documents (medical certificate, proof of loss of employment,...),

The statement can be made by telephone, by letter RARRAR : Recommended with notification of receipt or via the insurer’s online portal.

The insurer reviews your file and may ask for additional documentation.

If your claim is accepted, the insurer pays the required compensation (payment of the monthly payments or reimbursement of the principal outstanding).

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