It is a very popular procedure today. However, most banks impose certain requirements on borrowers, one of which is mandatory life and health insurance. However, many still have questions. Many people are interested in whether it is necessary to take out life and health insurance with a mortgage, especially to pay a fairly decent amount of money for it.
To answer the question of whether this procedure is mandatory or not, it is worth taking a closer look at the process of obtaining a policy. It is also recommended to pay attention to the advantages and possible benefits of insurance in relation to a person wishing to receive a loan.
What does insurance provide?
Everyone knows perfectly well that funds for the purchase of living space, as a rule, are issued for a fairly long period (up to 30 years). These are very unprofitable for banks, since during this period of time anything can happen to the client.
If we look at the problem from this side, then in this case we are talking about benefits for the credit institution. Are there any advantages to obtaining such a certificate for the borrower himself? Of course they exist.
For example, if the borrower suffers injuries that lead to his disability, then he will not have to pay a huge commission to the bank for the inability to make monthly payments. In this case, the responsibility for payments falls on the policyholder. In the situation of receiving disability of groups 1 and 2, the borrower will be insured against additional costs. In the event of the death of a bank client who took out a fairly large loan, his relatives will not have to pay off the debt.
Simply put, the insurance company will have to cover all losses of the bank caused by certain circumstances related to the borrower. At the same time, the living space taken on credit will not go anywhere. It will continue to be the property of the borrower’s relatives or himself.
If you inform the bank about the incident immediately after the occurrence of an insured event, then the risk that monthly payments will be increased is reduced to zero. Also, some people confuse the last 2 options for the entire term of the mortgage loan. This means that you will need to pay annually for the certificate. The interest on insurance will also be recalculated based on the balance of the debt. Therefore, you should think several times before refusing this service. Your best bet is to find out where mortgage life and health insurance is cheaper. In this case, it is worth paying attention to several important nuances. What should you pay attention to?
Where is it cheaper?
If we talk about calculating life and health insurance traffic for a mortgage, then it all depends on individual circumstances. The interest rate can range from 0.5 to 2.5% of the remaining mortgage debt. Of course, even a hundredth of a fairly large loan will hit the client hard.
In order to save as much as possible when taking out life and health insurance for a mortgage, it is worth checking with a bank employee which insurance companies are partners of the credit institution. In this case, you can familiarize yourself with each individual company and consider the existing interest rates.
Although there are online calculators on the websites of insurance companies, they do not always work fully, that is, they do not take into account the individual parameters of clients. It is much more convenient to contact the organization and personally communicate with the manager.
How is insurance calculated?
Of course, first of all, everyone is interested in what could lead to a significant increase in the interest rate for obtaining a certificate. It should be borne in mind that company employees pay attention to the age of the borrower. If he is not young, then, of course, the commission will be much higher.
Also, clients applying for a mortgage are asked to undergo a medical examination. Based on data on the presence of chronic diseases and other ailments, a decision will be made on the final cost of the insurance certificate.
As a rule, men have to pay large sums to obtain the form. This is due to scientific evidence and mortality statistics: unfortunately, representatives of the stronger sex live much less than women.
Also, the increase in the interest rate may be affected by the client’s position. If he works in dangerous conditions in hazardous production, then, most likely, the overpayment will be even higher. In addition, the amount of the loan and the length of the mortgage repayment period are taken into account. Also, the manager always evaluates the client’s external data. If he suffers from too much weight, smokes and drinks, then this is also a negative factor that affects the increase in overpayments.
Returns and cancellation of insurance
Sometimes it happens that clients apply for an insurance form, but suddenly realize that they are overpaying too much. In this case, they can actually issue a refund of the mortgage policy they received. However, it must be borne in mind that this is given a very short period of time. Usually it is no more than a few days. More precise deadlines can be found in the contract; they must be specified there.
It is also worth paying attention to the clauses in the contract that relate to the calculation of insurance and the possibility of a refund. The insurance company has the right to draw up an agreement at its own discretion, so there may well be clauses according to which the client does not have the right to count on any compensation. It is worth being attentive and asking the manager a question once again.
Only military personnel can refuse an insurance policy without any consequences, since their life and health are already insured by their occupation.
In what cases can the insurance company refuse to pay?
As mentioned earlier, before signing the contract, it needs to be studied in detail. The terms of payment must be spelled out in detail. At the same time, it is important to ensure that the amount of the amount that will be paid upon the occurrence of a particular insured event is indicated.
The contract specifies the responsibilities of the policyholder and the insurer itself. This is very important, because if some nuances were not indicated in the papers, then in this case the company can very easily refuse payments.
As a rule, to receive compensation it is necessary to collect the necessary documents. This responsibility falls on the policyholder. The insurance company has the right to refuse payment if an incident occurs that cannot be classified as an insured event.
Sberbank
In this credit institution you can not only get a fairly decent amount of money to purchase a new living space, they also issue insurance policies. In this case, any bank client who has taken out a mortgage in the amount of up to 11 million rubles has the right to receive documents.
If we talk about the amount of payment for life and health insurance for a mortgage in Sberbank, then the contribution is 130 thousand rubles. However, everything again depends on the individual parameters of the borrower. It is also worth considering other organizations that provide similar programs.
"VTB 24": life and health insurance on mortgage
This bank also provides its clients with the opportunity to take out a policy immediately upon receipt of funds. However, in this case, the conditions will be much more favorable than in Sberbank. In this case, a client who takes out life and health insurance for a mortgage at VTB will have to pay about 0.21% of the total cost of the selected home. However, the majority of citizens of the Russian Federation still prefer to contact insurance companies, which have been on the market for a long time and during this time have collected a huge number of positive reviews. It is worth considering them in more detail.
Sogaz: life and health insurance for mortgages
The main advantage of this organization is that customers can contact not only the company’s branch, but also receive money through the official website. As a rule, after submitting a request, the organization’s manager calls the user back and discusses the terms.
Another important point in taking out life and health insurance for a mortgage at Sogaz is that in this case, a medical examination, which is a prerequisite, is absolutely free.
If we talk about it, it will be 0.17% when it comes to the life of the borrower. There is also a very interesting service. It's called "borrower liability insurance." In case of non-repayment of the loan, the overpayment for the certificate is 1.17% of the total price of the apartment. However, it is worth checking the final cost of the documents with an employee of the organization, since everything depends on the specific bank, the loan amount and the repayment period.
"RESO"
In this case, we are talking about comprehensive insurance, which includes life, health and much more. In addition, the client of the insurance company will be protected in the event of loss of working capacity or disability. Thanks to this, life and health insurance for mortgages at RESO has a great advantage and benefit for borrowers.
In the event of disability, illness or death of the client, the company independently pays the bank the balance of the debt. The borrower's heir will also not have to worry about debts. In addition, such package insurance includes protection of the purchased property. At RESO you can issue a certificate according to personal conditions. This is very convenient, since each person may have different situations in life.
However, this insurance company is far from the only one where you can get such paper for a bank. Let's consider other options.
"Renaissance"
The main activity of this insurance company is the issuance of policies on the life and property of borrowers. In addition to the main insured events, the client also has the right to indicate his own versions of what may happen to himself or his property.
If we talk about the cost of obtaining life and health insurance on a mortgage at Renaissance, then in this case the amount is calculated exclusively individually based on the specific data of a particular client. However, the minimum cost of issuing the form will be 2.5 thousand rubles.
"Ingosstrakh"
This company is one of the five best insurers in the Russian Federation. Here you can get a fairly cheap mortgage life insurance policy. If the loan amount is no more than 11 million rubles, then you will need to pay about 16.5 thousand rubles for ordering an insurance form and customer service. Thus, at Ingosstrakh, life and health insurance for a mortgage will cost approximately 0.22% of the total cost of the selected home. These are more than favorable conditions for clients who want to reduce the interest rate on a general loan.
"Rosgosstrakh"
This insurance organization is also very popular among the population. She offers very low rates. If the home is insured by the insurance company under a comprehensive program, then in this case the cost of the certificate will be no more than 0.2% of the total cost. However, in this case, the bank where the mortgage was issued will necessarily be considered. The size of the loan, interest rates, type of property and much more are also taken into account. All borrowers must undergo a detailed background check.
However, at Rosgosstrakh, life and health insurance for a mortgage is quite cheap, so you should definitely consider this organization.
Life and health insurance for a mortgage makes it possible to reduce the interest rate on a target loan, but the condition is not included in the list of mandatory requirements for receiving funds. The client, by approving the execution of the insurance contract, agrees to additional expenses, since the mechanism of the procedure is based on covering a certain premium. Banking organizations recommend fairly extensive lists of companies with which the borrower can enter into an agreement. Insurers' offers vary significantly in terms of the cost of the service.
What is the essence of health and life insurance on a mortgage?
When drawing up an agreement to obtain a loan for the purchase of housing, an employee of a financial institution will certainly offer the client to insure his own health and life. The service is included in the mortgage programs of almost every bank.
An uninformed citizen will begin to ask questions - what is insurance, is it really necessary, how much will the contract cost and what benefit will he receive from it. Of course, the expert will immediately begin talking about the benefits of the product and in every possible way convince the borrower to accept the offer and use the service. And this is where we need to figure it out.
First of all, it is necessary to clarify that taking out this type of insurance is not mandatory. In general, mortgage insurance is aimed at 3 objects:
- purchased real estate;
- health and life;
- title (ownership of an object).
Without apartment insurance, a banking organization will reject an application for a mortgage, but the client has the right to refuse other types of services.
If we talk about the essence of life and health insurance for mortgage lending, the point is to guarantee that the bank will receive funds provided to the borrower in the event that the borrower temporarily or permanently loses the ability to fulfill contractual obligations. In other words, he will not be able to deposit money according to the established schedule.
According to the terms of the insurance, the reasons for providing the bank with the missing amount of the loan are:
- loss of legal capacity by the borrower for a period of more than 30 days (injuries, serious illness, etc.);
- assignment of disability groups 1, 2;
- death of the borrower.
When an insured event occurs, depending on the specific situation, the company undertakes to temporarily pay the mortgage or pay the entire amount remaining at the moment.
When taking out insurance for the borrower, there is a certain benefit - if something happens, the insurer will pay the loan, and the apartment will remain untouched (will not be confiscated for non-payment of the debt). In addition, the client's mortgage health and life insurance may affect the interest rate on the loan. In most credit institutions, if a citizen agrees to insurance, its value is reduced by 1%.
However, the benefit for the bank is also obvious - the financial structure protects its own interests and, in the event of unforeseen circumstances, one way or another, receives back the previously issued funds. That is why mortgage specialists often impose and force the borrower to insure the risks of non-payment of the loan for reasons related to the physical condition of the person.
Clients, in turn, should understand that insurance will require significant contributions, which will significantly increase the burden on the borrower’s budget. Payment will have to be made annually at the time of extending the contract for another 12 months, although if desired, the client can refuse the next extension procedure.
In addition, some organizations are likely to refuse to issue a targeted loan if the applicant is categorically against additional services. However, this factor will not be indicated as a justification, since the regulations of credit institutions do not define life insurance as a mandatory requirement for a mortgage.
The obviousness of the high cost of the insurance contract regarding the life and health of the borrower is not in doubt. For a clearer understanding, clients should know what affects the final amount of insurance and how the amount is determined.
Most often, the cost of the policy is calculated at a standard rate and does not exceed 1% of the size of the target loan at a particular time. Since the contribution is made annually, its value will decrease over time.
The cost of insurance services may be influenced by the following factors:
- Age - the older the client, the higher the tariff rate.
- Gender. For female representatives, the insurance rate may be reduced. This is explained by the fact that men are many times more likely to work in hazardous industries. Their life expectancy is somewhat shorter than that of women, according to statistics.
- Weight category. For borrowers with increased weight indicators, increased life insurance rates are provided. In some cases, they may not be able to provide services at all. A high degree of risk of disability plays a role here.
- Field of activity. Professions with an increased risk factor will entail an increase in tariff rates.
- Hobby. Passion for extreme sports will increase the cost of the insurance contract.
- Health status. The presence of chronic diseases and other pathologies will play a role in increasing the total amount.
- Loan size and price of the property. The higher the above indicators, the higher the cost of insurance.
- A history of relationships with the insurer, for example, a bonus for transferring from another office or personal discounts will help reduce the insurance amount.
One way or another, the calculation of the total amount is carried out taking into account the specific situation. Therefore, it is quite difficult to accurately determine the value of the agreement. In this case, we can only talk about approximate figures.
Insurance company offers
Credit institutions offer insurance services provided by both subsidiaries and other accredited offices. Citizens who want to get a targeted loan should be careful and study all offers to find out which company is cheaper to draw up an agreement with. It is important to remember that the client has the right to independently choose an insurer from the list provided, without going beyond its scope.
The most popular insurance companies offer the following rates:
- SOGAZ. Here the rate is 0.17% of the total loan amount.
- Renaissance Insurance. It also offers favorable conditions at a tariff of 0.18%.
- Sberbank Insurance. The company is part of the financial organization Sberbank. Here the cost of insurance ranges from 0.5 to 1% of the total loan amount. In case of refusal, the loan rate increases by 1%. If the client wishes to change insurer, the remaining funds will be returned only after the mortgage has been fully repaid. Otherwise, the money will not be returned.
- VTB Insurance. The organization offers clients a comprehensive insurance program, in other words, it will not be possible to draw up an agreement only for health and life. The agreement also includes title and collateral insurance. The average rate is 1% of the loan amount. When changing companies, conditions similar to the requirements of Sberbank apply. The agreement is concluded for the entire period of the mortgage loan with annual renewal. For other financial institutions, the policy period is 1 year.
- Alfa Insurance. Insurance is issued either for 1 year or immediately for the entire mortgage period. The rate is from 0.8% to 1% depending on the specific situation.
- VSK Insurance House. The tariff for the cost of a life and health insurance policy is 0.55% of the total loan amount. The agreement is valid for 1 year, after which an extension is required. If the client wishes to terminate the contract before the policy comes into force, it entails a refund of the entire insurance amount, but provided that less than 5 days have passed from the date of consent to the date of refusal.
- RESO-Garantiya. The company offers different rates depending on the bank that provided the loan. For Sber, the rate is 1% of the loan size. For other credit institutions, only comprehensive insurance is provided, where life and health are calculated at a rate of 1%, property - 0.18%, title - 0.25%.
- Alliance Rosno. When calculating the cost of a life insurance policy, a rate of 0.87% is applicable. At the moment, the organization does not cooperate with Sberbank.
- Rosgosstrakh. Here the tariff depends on gender. For men - 0.56%, but for women - 0.28%. For Sberbank: men - 0.6%, women - 0.3%. In case of early termination of the agreement, the remaining part of the insurance is paid only upon full repayment of the target loan.
- Yugoria. The company issues a comprehensive insurance contract at a rate of 3%.
So, if we talk about where it is cheaper to insure life and health when taking out a mortgage, Renaissance Insurance and SOGAZ offer optimal conditions.
When choosing an office for mortgage life insurance, you need to carefully study all the offers that exist in this area. You should rely on the list of companies provided by the financial institution where the loan agreement is drawn up. According to the data, the highest insurance rates are offered by Sberbank Insurance, but the lowest rates are offered by SOGAZ and Renaissance Credit.
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A mortgage loan issued against real estate has a long repayment period: from 5 to 30 years. And the bank that issued it quite rightly wants to protect itself from possible financial losses that may result from various circumstances. Mortgage insurance serves exactly this purpose.
What it is
Today, concluding an agreement to issue a loan for the purchase of housing on mortgage terms provides for several types of insurance:
- insurance of the collateral (mortgage);
- personal insurance (health and life) of the borrower;
- insurance against the risk of loss of ownership (title);
- liability insurance of the borrower in case of non-repayment of the loan.
The main purpose of all types of insurance accompanying the conclusion of a loan agreement and a mortgage agreement is, first of all, the redistribution of risks associated with a long debt repayment period.
The second goal that was set when creating the mortgage insurance system in our country was to make mortgages more affordable, reduce the down payment and interest.
It is expected that this will allow a large number of people who want to solve their housing problems without resorting to government assistance.
Who benefits from it?
Insuring the mortgaged item is beneficial to the bank. After all, it is he who owns the property that is pledged until the end of the payment period. Therefore, destruction or reduction in the value of this property as a result of damage is unprofitable for it.
The bank can protect itself from such financial losses by insuring the real estate it holds as collateral.
Life and health insurance is most beneficial for the borrower himself. After all, many diseases or injuries lead to loss of ability to work, that is, a source of income.
And the amount that will be paid by the insurance company will allow you to repay the debt to the bank. In the event of the borrower's death, his heirs will also be able to repay the loan from the insurance funds.
Title insurance is also beneficial to the borrower. But only if he is a bona fide purchaser.
That is, if it turns out that the acquisition of real estate occurred with violations through no fault of the buyer, then he will be protected from financial losses associated with the loss of his rights.
But borrower liability insurance is beneficial to both parties in the relationship related to the loan. The bank is protected from losses if, after the sale of the mortgaged apartment, it does not receive the full amount of the debt.
And the borrower receives the following benefits:
- reduction of the down payment;
- lower interest rate;
- absence of claims from the bank in the event of termination of payments and sale of the mortgaged apartment, even if these funds are not enough to repay the entire debt.
Is mortgage insurance required or not?
The law obliges you to insure only the collateral - an apartment or other real estate. Even if the insurance clause is not included in the loan agreement, the borrower-mortgagor is obliged to insure the property being mortgaged.
In practice, a loan will not be issued without an insurance policy. The term of such insurance coincides with the term of the loan. After its repayment and removal of the encumbrance, the obligation to insure one’s property turns into a right that may not be used in the future.
The insurance amount cannot be less than that issued under the loan agreement. Most often this is the loan amount plus 10% on top.
But many property owners prefer to insure their home for its full value. This will allow you not only to cover the debt to the bank, but also to receive the rest of the amount in your hands if such a need arises.
Voluntary
But all other types of mortgage insurance are voluntary. And if the bank tries to impose them on the borrower by including them in the agreement, then it is acting in violation of the provisions of the law. Although one can understand the bank's interest. He wants to protect himself from as many risks as possible.
Title insurance is valid during the statute of limitations for these transactions, that is, 3 years. This insurance is especially relevant for buyers in the secondary market, where there is a possibility of becoming embroiled in litigation for violation of the rights of third parties.
But even in the market of new buildings, violations and fraudulent schemes are not uncommon, which can lead to the recognition of the transaction as invalid with all the not very pleasant consequences.
Borrower liability insurance is strongly recommended not only by banks and insurance companies, but also by legislators.
Since loans insured in this way are regarded by the bank as more reliable, it does not need to transfer its risk of not receiving the full amount to other borrowers. Therefore, you can set a lower percentage and reduce the down payment to 10%.
Legal basis
The main provisions regarding mortgage insurance are set out in the Mortgage Law, which regulates all aspects of this legal relationship (dated July 16, 1998).
It was Article 31, on insurance, that was amended in June 2014. The same article establishes the obligation to insure real estate pledged as collateral.
You can refuse voluntary insurance by referring to the Law “On Mortgage”, which states that the borrower has the right, but is not obliged, to insure his liability.
And if the bank insists, you can refer to the law, which directly prohibits the imposition of additional goods or paid services.
What features does it have?
Since all types of mortgage loan insurance are independent, each of them can be purchased separately.
But in practice, most often a single contract is concluded, which includes all the conditions relating to both personal insurance and property and liability insurance. Such a comprehensive product is offered by many banks.
The advantage of such a contract is that it will cost less than four separate ones. But it is worth remembering that insurance is an individual product.
Its terms will be different for each borrower. The cost of insurance will be influenced by the age and profession of the borrower, the characteristics of the property being purchased, the loan amount and the term of the contract.
But, as a rule, this is about 1-1.5% of the cost of the loan. In rare cases the value may be less or more.
The peculiarity of borrower liability insurance is that it does not eliminate the risk of being left homeless in the event of non-payment of the loan.
But it allows you to avoid additional financial requirements if, after selling the apartment at auction, the proceeds, for various reasons, turned out to be less than the loan debt. The missing funds will be paid to the bank by the insurance company that entered into the contract.
What to do if you don’t have enough money to pay off your debt in case of an insured event
Bankers assure that this cannot happen. Before making the next calculation, the insurance company must find out how much the debt is. At the same time, the bank does not allow any part of the debt to be “not covered” by the insurance policy.
Company refusal to pay
In this case, you need to contact the arbitration court. You need to know that the bank will be on your side. But it is worth investigating only if, when applying for insurance, you did not hide the fact due to which the insured event occurred. In this case, the court will be on the side of the insurance company.
What risks might there be?
Various types of mortgage insurance seek to minimize the consequences of various risks. In this case, the list of insured events, as well as the amount of payment, will be clearly defined by the contract. Let's take a closer look at them.
When insuring real estate pledged, the risk of destruction or damage to residential premises as a result of fire, natural or man-made disaster, technological errors or intentional actions of third parties is primarily taken into account.
If the home is damaged, compensation is paid to the borrower. Of course, only if he is not involved in the occurrence of the insured event.
But if the home was completely lost, then the bank will receive an insurance payment in the amount of the loan balance. The risks of the borrower's personal insurance will be his death or disability (groups I and II).
If this event occurs during the validity period of the contract, then the insurance company is obligated to repay the debt and interest on the loan.
The mortgaged housing will be freed from encumbrance and will become the property of the borrower, and in the event of his death, his heirs.
Title insurance considers the risk of a court decision on the loss of title to a home under collateral. The risk that the loan will not be repaid due to various circumstances is insured as the borrower's liability.
In this case, even if the sale of the mortgaged home does not cover the debt, the insurance company will pay it off. For the bank, this is the risk of financial losses in the event of failure to fulfill obligations under the contract.
Where can I apply?
Despite the fact that today many companies offer mortgage insurance services, they are all bound by obligations with the AHML Agency.
This structure, created by the Government to develop the mortgage lending system in Russia, acts as a reinsurer under borrower liability insurance contracts.
Therefore, it is best to choose one of the insurance companies that are official partners of AHML. Their list is presented on the Agency's website.
Large banks that implement mortgage programs usually have their own recommendations for choosing an insured, which coincide with the AHML list.
Banks prefer to deal with well-known and large participants in the insurance market, so they often do not agree to the candidate proposed by the borrower, so it is advisable to reach agreement on this issue.
Refusal to conclude an insurance contract may result in a requirement to return the entire remaining amount. Such conditions are provided for in the loan agreement.
Mortgage insurance is not a bank's desire to get as much as possible. This is a very useful and effective tool that allows you to protect interests and reduce the risk of financial losses for both the lender and the borrower. In addition, it is insurance that makes mortgages more affordable.
Video: IncomePoint.tv: Mortgage Insurance
When drawing up a mortgage agreement, clients are offered to take out life insurance, since the document is concluded for a long period. Thanks to this service, the debt will be paid to the bank, even if the borrower is unable to do so due to health reasons. Before concluding an agreement, you need to familiarize yourself with the peculiarities of its execution, cost and legality.
Is life and health insurance necessary for the borrower with a mortgage?
First you need to make sure why the borrower needs insurance. It is needed to protect against the risk of non-payment of a loan due to health difficulties. This may be due to loss of capacity.
But no one can predict whether injuries may occur during the payment of the mortgage, due to which a partial or complete loss of ability to work is recognized.
Therefore, banks offer to issue an insurance contract to protect themselves from the risks of possible non-payment. If the borrower has such a policy, then in the event of disability, the company that provided the services will repay the loan. If an insured event occurs, the bank client will not pay the mortgage amount.
Insurance cost
Each insurance company has its own prices for services, so it is difficult to determine the exact price.
Approximately the following rates apply:
The tariff is determined not only by gender and age, but also by the client’s health status. Usually it is necessary to undergo an examination by doctors, which determines whether there are chronic diseases. If yes, then the price of insurance will be higher. If you have complex ailments, a mortgage is usually denied.
The cost of insurance is affected by your profession. If the client works in an office, then there will be no increase in price. But for risky professions, the cost is inflated.
If the client previously had voluntary insurance, then when applying for a loan you need to provide a document. If you take out comprehensive insurance, which includes protection of life, collateral, and title, the price for services will be lower. Payments on it are counted along with the debt, and become smaller every year.
Where can I get an insurance policy?
Today there is no such thing as accreditation of an insurance company with banks. But they have the same requirements. When receiving a mortgage, the borrower is offered to use the services of one of the insurance companies. The bank receives a commission for each concluded agreement.
If the borrower has insurance, he may require to use the services of his insurance company when obtaining a mortgage. You can find a bank where such a document will definitely be accepted. To do this, an agreement is drawn up with the insurer to add a new beneficiary - the bank.
Therefore, the borrower does not need to look for an insurance company. When applying for a mortgage, the bank offers a list of its organizations that provide services.
You just need to choose the conditions that suit you, and you can take out insurance.
Documents for obtaining insurance
In banks, registration is completed quite quickly.
The client must prepare the following documents:
If the client provides a medical certificate of health, which is certified by the seal and signature of a specialist, then it affects the amount of insurance payments. Every person has the right to demand a low interest rate. You should always remember your personal rights and fill out documents carefully.
When the down payment is paid, the borrower receives an insurance policy. Payments can be made in cash or by transfer through guarantors. The cost of insurance is calculated based on various factors, which must be taken into account when the client contacts the bank. It is always necessary to read the contract, and ask specialists about unclear things. A correctly drawn up document will guarantee the occurrence of possible risks.
What to do if an insured event occurs?
If an insured event occurs (dismissal, illness), the borrower must read the contract. If he died, then this should be done to the relatives. Then you need to contact the insurance company by sending a notification there. Usually a short period is specified during which the borrower can apply.
After this, the company offers to prepare the necessary documents, which will determine whether the insurance company will repay the mortgage or not. The fact of an insured event is determined by the company, for which it carries out an inspection.
Documents are provided as evidence of the insured event. If there is a dismissal, it is necessary to provide an order, confirmation from the employer, and a work record book. With the assignment of disability, the borrower will have many documents confirming this fact.
The insurance company checks the documents and then decides whether to pay compensation or not. The beneficiary is the bank to which the money is paid. If an insured event occurs, the borrower is released from repaying the loan. Using this instruction, insurance rights are exercised.
Insurance company refusal to pay
All payment terms are specified in the contract. It indicates the amount of amounts that are due upon the occurrence of an insured event. In this case, not only the insurer, but also the policyholder has responsibilities.
If payment is refused, then these reasons are justified. Compensation can be provided no earlier than all documents have been collected. This must be done by the policyholder.
If compensation is needed due to deteriorating health conditions, then you need to collect the necessary medical certificates. They will be the confirmation on the basis of which payments are made.
Some companies refuse to pay compensation. For example, the incident was not recognized as an insured event.
Reasons for refusal may be:
- justified;
- unreasonable;
- conditionally justified.
The former are legal because they do not infringe rights. Incidents not specified in the contract are considered grounds for refusal. In the second case, a violation of insurance rights occurs. Then you need to go to court. Usually the decision is made in favor of the client. Conditionally justified reasons are those for which there is no clear definition in the law.
Not everyone goes to court, but this is due to several reasons:
- lack of time;
- collection of many documents;
- ignorance of rights.
Before filing an application with the court, you should contact a lawyer who will help you choose the best solution to the problem. A specialist will help you draw up your application correctly so that it is accepted immediately. It indicates the violations due to which the appeal is being drawn up. You need to rely on the law. The amount of the claim is determined by expert estimates. The client has the right to demand compensation for state duties and other expenses. If the decision is made in favor of the client, the company will pay him a penalty for the entire period of delay.
Is it possible to refuse insurance?
All banks take into account their rights. Therefore, every client is encouraged to take out mortgage insurance. He has the right to refuse it within 14 days, which is prescribed by law. But should we give it up?
Without taking into account insurance, the bank may not issue a mortgage or increase the interest rate. In the second case, you will need to overpay approximately 2% per year. In addition, insurance protects against many unforeseen situations.
How long does life insurance last for a mortgage?
The property is insured for the full loan period. This document is also valid for life and health for the entire period. Title insurance is concluded for 3 years, since such a statute of limitations is established by law.
Life and health insurance is a useful service for which the client pays himself. In this case, he is protected from many situations. Whether it is worth formalizing it or not is up to him to decide, since no one has the right to force him to do it. If you still want to take out insurance, you need to read the document. All its terms and conditions must be clear.
Dmitry Balandin
