Loan insurance: watch out for the confusion between disability and incapacity!

Home loan insurance covers at least the death and total and irreversible loss of autonomy of a borrower. But when a disaster occurs, the latter may have unpleasant surprises concerning the coverage of his insurer, because the precise definition of the guarantees is not always well understood upstream. Morality: it is necessary to study the question well in advance!

A race against time

A race against time

Three months: this is the period generally accepted between the signing of the sales agreement and that of the final act during a real estate transaction. During this period – which can nevertheless be extended up to eighteen months when it is entered in the compromise, the candidate for the purchase must find the financing and insure his mortgage. But this last point often appears more as a constraint than an issue for the borrower, who is tempted to go “to the simplest” rather than the most precise.

PTIA, a (very) restrictive guarantee

PTIA, a (very) restrictive guarantee

These are in fact two guarantees: death and total and irreversible loss of autonomy. The PTIA guarantee qualifies physical or mental disability before the age of 65, which deprives the borrower of any capacity to carry out a gainful activity. It is therefore a person who needs assistance in at least four acts of daily life (washing, dressing, eating and moving around). In the insurance lexicon, PTIA is assimilated to death and represents an extension of this latter guarantee, which justifies the payment of the capital under the loan insurance contract, with its automatic termination.

IPT, IPP: optional covers

However, this definition of disability may seem vague to borrowers who do not master the sometimes not understandable language of insurers. There is indeed a real nuance between the PTIA and IPT guarantee (permanent and total disability). The latter, optional, concerns substantially the same type of situation, but it is the disability rate that differs: between 66 and 99.9% depending on loan insurance contracts.

This can for example apply to blindness (85% disability rate) but not hearing loss (60%) or locomotion (65%), even less loss of a limb (30 % for one foot, 40 to 50% for one hand). For these handicaps, the IPP guarantee (permanent and partial invalidity) is taken into account.

Insurance delegation for tailor-made protection

Insurance delegation for tailor-made protection

The question of protection must be taken very seriously when looking for insurance, which should encourage the borrower to use competition to seek a tailor-made contract. The advice and support of a loan insurance broker are crucial in this regard, especially since it also allows you to benefit from advantageous pricing through the delegation of insurance.

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