Real estate loans: what will change with the new borrower insurance law

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Borrowers under 60 will no longer have to complete a health questionnaire for loans below 200,000 euros
Borrowers under 60 will no longer have to complete a health questionnaire for loans below 200,000 euros (©thodonal / AdobeStock)

It’s a revolution for home loans. The borrower insurance bill was unanimously adopted by the Senate on Thursday, February 17, 2022, paving the way for promulgation very soon. It will be implemented in June for new insurance contracts and in September for current contracts.

At the end of the Joint Joint Commission, the deputies and senators reached an agreement, and Parliament has just definitively validated the law. Carried by the deputy (Agir) Patricia Lemoine, it aims to facilitate, in a “fairer, simpler and more transparent” way, home loans to individuals.

It is an immense pride to see this text succeed, but above all it is a sincere happiness for all patients and former patients, and more generally the millions of borrowers.

Patricia LemoineMember of Parliament (Acting) for Seine-et-Marne

Cancel the insurance at any time

This is one of the main changes brought about by this law: people who have taken out a home loan can change insurance at any time. “This measure will simplify the change of borrower insurance and will make it possible to play on the reduction in prices, without costing the State a penny,” insists the parliamentarian on her Facebook account.

According to The UFC – What To Choosetermination at any time will allow a gain of 550 million euros per year for borrowers. The magazine gives the example of a 35-year-old couple who have been repaying their loan for five years: “By negotiating the insurance offered by the bank and/or replacing it with an alternative contract, they can hope to save 13,000 euros. »

Previously, according to the Ministry of Economy, it was only possible to terminate the contract:

  • No later than 15 days before its anniversary date during the 1st year of the contract;
  • At least two months before its anniversary date after the 1st year of the contract.

Banks take advantage of this situation in particular to offer only home insurance, often at much higher prices than the competition.

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Another provision included in the law: the insurer will have the obligation to inform the insured each year of his right of termination.

End of the medical questionnaire

The other measures concerned more the medical condition of the borrower. The health questionnaire has thus been abolished and the banks will no longer have to know the medical liabilities of the insured, if the latter borrows less than 200,000 euros and is under 60 years old.

This questionnaire is a tool used by banks to whether or not to grant credit, and above all take out insurance. This replaces the borrower to repay the outstanding capital in the event of death or total loss of autonomy. Depending on the medical history, the cost of insurance can reach very high amounts, not to say prohibitive.

Patricia Lemoine insists on the “historic” scope of this measure, “for all people who have had a health problem who will thus be able to obtain insurance without surprises”.

Lowered right to be forgotten

Last point, the deadline for the right to be forgotten for cancer pathologies and hepatitis C has been reduced from 10 to five years.

It is therefore a victory for patient associations, which have been asking for years for an evolution of these practices, which they describe as “double punishment for people living with a chronic pathology”.

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