Access to borrower insurance facilitated for seniors
Seniors are still more likely to take out a mortgage. Their profile is also quite satisfactory for the banks. Indeed, with a longer life expectancy, no risk of job loss and generally substantial savings, this category of borrowers reassures the lending institutions.
However, there is one point that can hinder access to mortgage insurance: their state of health, in case of a health problem aggravated. And the subscription of this insurance is a condition imposed by the banks to grant a mortgage. Fortunately, there is one solution: insurance delegation.
The loan insurance offer for seniors is expanding
Since July 2014, the Hamon law offers the possibility to anyone realizing a mortgage to replace their loan insurance contract at any time during the first year of the loan. As of 2018, thanks to the Bourquin amendment, all outstanding contracts will be terminable each year on the anniversary date. Thanks to this legislative evolution, the offer of borrower insurance for people wishing to become owners, especially seniors, is broader and more attractive.
If banks can be reassured by the fact that the category of seniors has a longer life expectancy, no risk of job loss and savings that are often significant, they may be reluctant to fund households over 65 years old. According to figures provided by loan specialists, from 2015 to 2017, the percentage of loans under 10 years old subscribed by people over 65 increased from 32.9% to 22.4%. At the same time, loans taken out over a longer period are gaining ground. Thus, 53.1% of seniors choose a period of 10 to 15 years while 19.9% managed to negotiate home loan agreements over 15 to 20 years.
Insurance delegation: the solution for seniors
The solution to circumvent the age limit imposed on seniors by group insurance contracts of banks is in the insurance delegation. Indeed, many organizations specializing in individual loan insurance can offer seniors adapted coverage accessible until the age of 85 or even 90 years.
In addition, insurance rates are often lower than those charged by banking institutions. For example, for a senior 70-year-old borrower, the bank proposes an average rate of 1.8% against 0.92% for an individualized offer.
Also, regarding the aggravated health risks, the insurance delegation is a real alternative allowing to access to the insurance offers borrower specific to each problem of health. This means that where the bank can refuse to give you group insurance due to illness, individual insurers can insure you and give you access to home loans.
Finally, for anyone who may face a refusal of loan insurance due to an aggravated health problem, it is possible to resort to other alternatives:
Mortgage real estate
Pledge a life insurance policy
Play the Aeras convention (insure and borrow with an aggravated health risk), under the condition not to exceed a € 320,000 borrowed capital and to have cleared the loan before the age of 71.