Loan insurance chf: guarantee a loan in currency
The cover of a pre-insurance chf
Loan insurance systematically guarantees the risk of death and disability. If you buy a house or apartment as a principal residence, the risk of incapacity for work (work stoppage) must also be guaranteed.
If you work in Switzerland, the company employing you can cover you for 3 or 6 months or more, in case of work stoppage. This is a point that you must remember to check under the terms of your employment contract. This could indeed affect the cost of your chf pre insurance.
Every real estate borrower must be covered. Total coverage must be at least 100%. If you borrow alone, you will ensure your credit at least 100%. In the case of a loan to two, this quota can be divided according to the income of each (70/30, 60/40, 50/50…). But each of the two co-borrowers can decide to cover themselves 100%. In this case, the total coverage would then be 200%. If one of the two dies, the credit is then fully reimbursed by the insurer. Your pre-paid insurance would of course cost you more.
Bank insurance or individual insurance?
According to French law, banks are not entitled to impose their insurance contract. The Lagarde law requires them to accept a delegation of insurance: an individual loan insurance underwritten by the borrower from another insurer. In order for it to be accepted by the bank, this alternative insurance must have a minimum level of coverage equivalent to that of the bank insurance contract.
Opting for an individual insurance, as part of the insurance delegation, can generally be more interesting if you are young (under 40), in good health and do not smoke.
In the case of a currency loan, it should be noted that no individual French insurance generally covers a debt in Swiss francs. However, some banks accept private cover, but with a euro insurance of the capital. In this case, in order to cover the foreign exchange risk, the banks ask to cover a larger capital (from 105 to 120% of the capital).
The cost of a loan insurance
The cost of loan insurance for a credit in foreign currency is not negligible. When you are looking for a home loan, it is therefore important to compare offers taking into consideration the cost of insurance.
In order to make a comparison of 2 credit offers, you need to look at the overall cost, not just the rate. Since the loan rate is not calculated in the same way as the rate of an insurance, you can not add the credit rate and the insurance rate.
In contrast to the insurance offered by the banks, individual insurance offers degressive contributions. The cost of insurance varies during the loan: it is important at the beginning and then decreases with repayments. Most of the insurance is paid in the first years of the loan.
Make a comparison of the loan insurance available on the market to find cheaper loan insurance cheaper than that of the bank. You may be able to save a significant amount on the overall cost of your mortgage.