Actualité - Mortgage loan insurance, the "invisible" detail that can cost you dear

Mortgage loan insurance often accounts for between 20 and 30% of the total cost of a loan, sometimes more than the notary fees themselves, and yet almost no one really negotiates it. In France, since the Lemoine law, you can cancel your borrower insurance at any time, at no cost and with no renewal date to respect, as long as the new contract offers equivalent coverage. Between a group insurance policy offered by the bank and an individual external insurance policy (délégation d'assurance), the price gap today reaches 50 to 70%, which amounts to 12,000 to 18,000 euros in savings on a 300,000-euro loan repaid over 20 years. These are the very concrete figures I will explain in this article, from the perspective of an advisor who sees clients every week paying far too much without even realizing it.

In summary

Loan insurance can account for 20 to 30% of the total cost of a mortgage, often more than the notary fees.
The Lemoine law allows you to change your borrower insurance at any time, with no fees or penalties, provided the coverage is equivalent.
External insurance (délégation d'assurance) costs on average 50 to 70% less than the bank's group contract, especially before the age of 40.
Since the Lemoine law, the health questionnaire is no longer required if the insured portion does not exceed 200,000 euros per borrower and if the loan is repaid before the borrower turns 60; the right to be forgotten applies after 5 years for certain conditions.

Why this insurance remains the great overlooked item of the mortgage

When you put together a loan application, everything moves very quickly. The interest rate captures all the attention: you compare banks, negotiate a few tenths of a percentage point, and sign the loan offer with a sense of mission accomplished. The insurance, for its part, comes almost at the end of the process, slipped into the same document and presented as a simple administrative formality. The result: nine borrowers out of ten accept the group contract offered by their bank without ever comparing, even though this is often where a good part of the real cost of their loan over 15, 20 or 25 years is decided.

A cost hidden over time

The trap of borrower insurance is that it is not noticeable at the time. A difference of a few tens of euros per month seems harmless compared with a monthly loan payment of 1,200 or 1,500 euros. But multiply those few tens of euros by 240 months, and you very quickly reach a five-figure amount. I have seen clients save the equivalent of a fitted kitchen, or a year of condominium charges, simply by changing their insurance contract after signing their loan.

The "I trust my bank" reflex

It is only human, and I understand it: when you have just obtained a loan, you want to trust the institution that granted it. However, loan insurance and the loan itself are two different products, sold by the same counterparty. The bank has every interest in keeping you on its group contract, which is pooled and often more expensive for young or healthy profiles. Nothing obliges you to accept it, and that is precisely what the law now regulates.

How mortgage loan insurance really works

Before talking about savings, you need to understand what this contract actually covers. Borrower insurance protects the bank, but also your family, in the event of a serious setback during the term of the loan.

The basic coverages

A standard contract covers at a minimum death and total and irreversible loss of autonomy. Most banks also require temporary work incapacity and disability coverage, which takes over your monthly payments if you can no longer carry out your professional activity for a certain period. Some profiles, notably self-employed workers or rental investors, add job loss coverage, which is optional but sometimes reassuring.

The notion of quotité, often poorly understood

The quotité is the share of the borrowed capital covered by the insurance for each borrower. For a couple, you can, for example, split it 50% and 50%, or 100% and 100%, or even 70% and 30% depending on each person's income. This choice has a direct impact on the amount of the premiums, but also on the thresholds for access to the simplified health questionnaire: for two borrowers each insured at 50%, the ceiling without a health questionnaire rises to 400,000 euros in total, compared with 200,000 euros for a single borrower insured at 100%.

The expert's word

"In twenty years in this business, I have seen hundreds of loan files go by, and I can tell you one thing: borrower insurance is almost always the item on which you can save the most money without sacrificing anything in terms of the security of the project, provided you take the time to compare and do not settle for the first contract that comes along, offered by the bank advisor; I remember a couple in their thirties, both non-smokers and in perfect health, to whom the bank had offered a group contract at more than 100 euros per month, whereas an external insurance delegation, with strictly identical coverage, came to less than 35 euros, a saving of more than 15,000 euros over the total term of the loan; this is not theory, it happened again just last week, and that is why I keep telling my clients, sellers and buyers alike, that good support never stops at the search for the property or the price negotiation, but continues until the financing is completely wrapped up, insurance included, because that is often where the true profitability of a property project is determined over the long term."

The Lemoine law: the right to change insurance at any time

In force since 2022, the Lemoine law has changed the game for millions of borrowers. It allows you to cancel your loan insurance at any point during the life of the loan, without waiting for a contract anniversary date, and without cancellation fees.

Complete freedom, but within a framework

The only condition set by the law is that the new contract must offer coverage at least equivalent to that required by the bank. In practical terms, you must provide a standardised information sheet listing the minimum coverage expected, and your new insurer must match or improve on each item. The bank then has ten working days to accept the change or refuse it with reasons, a refusal that remains rare when the file is well put together.

Why so few borrowers still take advantage of it

Despite this freedom, many homeowners are simply unaware that they can change insurance at any time, even ten years after signing their loan. Others wrongly think that the process is complicated or risky. In reality, a good broker or a property advisor used to these files can do most of the work in a few exchanges, and the financial gain more than justifies the time invested.

Insurance delegation versus bank contract: the gap that changes everything

This is where the real saving is made. The bank's group contract applies pooled pricing: everyone pays roughly the same rate, regardless of age or health. Insurance delegation, on the other hand, individualises the price according to your actual profile.

Particularly marked differences before the age of 40

For a healthy, non-smoking borrower under 40, the effective annual insurance rate offered by the bank generally falls between 0.30% and 0.50% of the amount borrowed. With delegation, the same profile can obtain a rate of between 0.07% and 0.18%. On a capital of 300,000 euros borrowed over 20 years, the cumulative difference is between 12,000 and 18,000 euros, a sum that could fund renovation work or make up a down payment for a future rental investment.

Older or higher-risk profiles: a different equation

For older borrowers, smokers, or those with a medical history, the gap narrows, and sometimes the group contract becomes competitive again, or even more advantageous. This is why one should never generalise: each file deserves a personalised simulation, comparing several quotes before deciding.

The practical tip

Systematically request an insurance delegation quote before signing your loan offer, even if the bank puts pressure on you over deadlines.
Keep the standardised information sheet provided by the bank safe: it lists in black and white the minimum coverage required, which is essential for comparing equivalent offers.
Have any new contract reviewed by a loan insurance broker before sending it to the bank, to avoid a refusal due to a missing guarantee.
Compare again every two or three years, even after having already switched once: the delegation market evolves quickly and prices fall regularly.
If you are selling in order to buy a larger property, take advantage of the new financing to start out with optimised insurance from the outset rather than renewing the old contract out of habit.

Quotité, insured capital and choosing the right level of coverage

Choosing the quotité is not just a technical matter; it directly affects the protection of your family and your monthly budget.

Adapting the coverage share to the household's situation

For a couple in which only one partner works, it is generally in their interest to insure the main earner more heavily, for example 100% on one and 50% on the other, rather than the conventional 50/50 split. Conversely, two equivalent and stable incomes may justify an equal split. The idea is simple: in the event of the death or total disability of one of the borrowers, the monthly payment must remain manageable for the one who remains, without jeopardising their ability to stay in the home.

The impact on the health questionnaire

Since 1 June 2022, the Lemoine law has eliminated the health questionnaire when the insured share of the capital does not exceed 200,000 euros per borrower and the loan is fully repaid before the insured person's 60th birthday. Since 1 September 2026, insurers have begun to count only mortgage loans towards this ceiling, which widens access to this simplification. In practical terms, for a couple each insured at 50%, this opens the way to loans of up to 400,000 euros in total without a medical questionnaire, a real relief for borrowers who feared having to disclose a health history.

Right to be forgotten and the health questionnaire: what has really changed

The health questionnaire frightens many borrowers, often unnecessarily. The point is not to conceal anything, but to understand the rules so as not to pay an unjustified premium surcharge.

The right to be forgotten, a major advance

The right to be forgotten allows former cancer or hepatitis C patients to no longer have to declare their past condition, subject to three cumulative conditions: the end of the treatment protocol must date back more than five years on the day of the application, no relapse must have been observed, and the contract's expiry must fall before the insured person's 71st birthday. In practical terms, this means that a former patient who has been cured for more than five years can take out loan insurance on standard terms, with no premium surcharge or exclusion related to that history.

What still has to be declared honestly

Outside the situations covered by the right to be forgotten or by the removal of the questionnaire below the threshold of 200,000 euros per borrower, honesty remains absolutely mandatory. A false declaration, even through unintentional omission, can lead to the outright cancellation of the contract at the most critical moment, that is, when a claim arises. It is therefore better to have a clearly identified premium surcharge from the outset than a contract that is weakened for good.

How to compare and change insurance without taking risks

Changing borrower insurance cannot be entirely improvised, even though the process is now much simpler than it was a few years ago.

The three-step method

First, obtain the standardised information sheet from your bank, which lists the minimum guarantees required. Next, have several quotes drawn up under the delegation of insurance option, ideally through a specialist broker who knows the subtleties of each insurer. Finally, send the new contract to your bank, which must reply within ten working days with an acceptance or a reasoned, written refusal.

The right time to act

The best time remains before signing the loan offer, as this avoids any administrative back-and-forth. But if you have already signed, rest assured that nothing is lost: you can change insurance at any point during the life of the loan, even five, ten or fifteen years later. This is also a point to raise if you are considering estimating the value of your property in order to sell and buy elsewhere: you may as well start out on a sound financial footing from the very beginning of the new project.

Borrower insurance, a criterion to build into your overall project

All too often, loan insurance is considered independently of the rest of the property project. This is a mistake, because it is an integral part of the overall budget of a purchase, on the same footing as the price of the property, notary fees or the work to be planned.

A negotiating criterion in its own right

When you browse property listings and work out your borrowing capacity, build in from the outset a realistic estimate of the cost of delegated insurance rather than the inflated rate of the group contract. This can literally change your purchasing budget by several thousand euros, and therefore widen the range of properties within your reach.

Surrounding yourself with the right professionals

A field-based real estate advisor does far more than show you properties: they generally know the most reliable financing and insurance brokers in their area, and can point you to the right contacts at the right time. Feel free to find a local real estate advisor who can support you throughout your entire project, including financing and insurance, and not just the search for a property.

Conclusion

Mortgage insurance is anything but a minor detail, even though it often feels like one when signing a loan offer. Between the freedom granted by the Lemoine law, price differences that can reach 70% between a group contract and an individual (delegated) policy, and the recent changes to the health questionnaire and the right to be forgotten, borrowers now have all the cards in hand to pay a fair price. The key is never to treat this step as settled or set in stone: you can compare before signing, and you can always switch afterwards, with no fees or penalties. Take the time to discuss it with trusted professionals, brokers and real estate advisors, to turn this invisible detail into a real source of savings on your life project.

FAQ - Frequently Asked Questions

Can I change my borrower insurance at any time without fees?

Yes. Since the Lemoine law of 2022, you can cancel your mortgage insurance at any time, without waiting for an anniversary date and without cancellation fees, provided that the new contract offers coverage at least equivalent to that required by your bank.

What is the price difference between bank insurance and delegated insurance?

The gap can reach 50 to 70%, particularly for healthy borrowers under 40, for whom the effective annual insurance rate typically falls from 0.30-0.50% with a group contract to 0.07-0.18% with a delegated policy, which represents savings of 12,000 to 18,000 euros on a 300,000-euro loan over 20 years.

Is the health questionnaire still always mandatory for a mortgage?

No, not systematically. Since the Lemoine law (June 1, 2022), the health questionnaire is no longer required when the insured portion does not exceed 200,000 euros per borrower and the loan is repaid before the insured person turns 60. If either of these two conditions is not met, it remains mandatory.

What is the right to be forgotten in borrower insurance?

The right to be forgotten allows a former cancer or hepatitis C patient to no longer declare their past condition if the treatment protocol ended more than five years ago, with no relapse recorded, and if the contract's expiry date falls before their 71st birthday.

How do I choose the right insurance share for a couple of borrowers?

The share should reflect the real weight of each income in repaying the loan: a couple with a main income and a supplementary income will often benefit from insuring the higher earner more heavily, for example 100% and 50%, rather than an automatic 50/50 split, so that the monthly payment remains manageable in the event of hardship for either borrower.

Every situation is different: the simplest approach is still to talk to a real estate advisor near you.