Consumer credit: borrower's insurance

Verified 01 July 2023 - 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 trouble getting insurance because of serious health problems, you can use the agreement Aeras: titleContent.

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

Insurance is not compulsory for consumer credit. So you can decide not to insure. However, it should be noted that the refusal of insurance may have a negative impact on the decision to grant the loan or on the interest rate.

In addition, the lender may make the purchase of insurance a mandatory 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.

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

  • Guarantees for which it grants cover
  • Conditions for triggering them
  • Exclusions
  • Amount of the monthly contribution over the total duration of the loan

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

This proposal is contained in the advance credit offer for the lender's insurance. 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.

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

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 15calendar 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

You can choose which risks to insure, among those offered by the insurer:

  • Insurance death is used to protect your heirs from repayment of the credit if you die.
  • Insurance sickness and disability waives your monthly payments in case of illness.
  • Insurance loss of employment waives your monthly payments in case of unemployment.

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.

However, the following three conditions must be respected:

  • The maximum amount of the consumer credit shall not exceed €17,000
  • The maximum term of the loan must not exceed 4 years
  • You must be up to 50 years of age at the time of application.

You will be required to make an honorary statement indicating that you do not have loans in excess of the total €17,000.

If any of these conditions are not met, you will need to complete the medical questionnaire related to the insurance application.

Please note

the Aeras Convention incorporates a right to be forgotten for people who have recovered from cancer and whose treatment has been finished for at least 15 years. They don't have to report it to the insurer. They may not be subject to an additional premium or be excluded from the guarantee.

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