Home loan: beware of job loss insurance

It remains marginal and little known.

Job loss insurance should not be confused with borrower insurance which allows a future owner to protect himself and his family in the event of death or disability.

The loss of employment guarantee covers the purchaser on a CDI, only in the event of unemployment linked to an economic redundancy, and under strict conditions of application.

It is a complementary insurance which is absolutely not compulsory.

But with the health crisis, some banks are pushing or even requiring their customers to subscribe.

Constrained by the recommendations of the High Financial Stability Council (HCSF) to tighten their granting conditions and integrate the cost of insurance into their loans, banks have become much more careful about the professional situation of their future borrowers.

Do they seek to better protect their customers against the vagaries of life?

To guard against the expected increase in bankruptcy filings and with it, that of unpaid employees made unemployed?

And / or to increase their margins on mortgage loans, a key product that generates, competition requires, little income for banks?

"Commercial pressure"

This approach, even if it concerns only certain local agencies, has not, in any case, gone unnoticed. It annoys at the highest point certain competing brokers in credits and insurance. “Several regional offices of certain banks, such as Crédit Agricole and Caisses d'Épargne, encourage and attempt to impose job loss insurance when it has little interest and offers extremely low coverage to borrowers , protested Philippe Taboret, deputy managing director of the broker Cafpi. We are well aware of this commercial pressure which consists in saying if you want your credit, you have to take out this guarantee… Of course, the customer can refuse it but he then risks having his loan application rejected ”.

This is confirmed by other brokers such as Vousfinancer or Magnolia.fr.

“Since the start of the year, several mutual bankers have strongly advised their worried clients to subscribe,” says Sandrine Allonier, director of studies at Vousfinancer.

“We see some indeed even if their number remains limited, confirms Astrid Cousin, spokesperson for the insurance broker Magnolia.fr, who notes that this guarantee is often offered to couples working in the same company.

But not only.

Read alsoReal estate credit: 5 tips for choosing the right loan insurance

A couple on permanent contracts wishing to build their main residence was recently surprised to see their banker add the job loss guarantee in the insurance of the husband, employed in mass distribution, a sector however well spared by the Covid crisis. 19. Same incentive for another couple working in the private sector, not having experienced a period of partial unemployment, to obtain the credit necessary for their rental investment.

"It is offered to those who do not need it but not to those who need it," sums up Michel Guillaud, president of the consumer defense association France Conso Banque.

Faced with people who are really at risk, working in events, hotels or aeronautics, banks have become much more radical and simply deny them access to real estate credit, ”he notes.

A guarantee added to borrower insurance

Some establishments even offer an advantageous "price package" by including the job loss guarantee in the classic borrower insurance.

Contacted, the National Federation of Agricultural Credit ensures to offer "an interesting package for the customer", recalling that "the guarantee is optional and reassures the customers who subscribe it".

“This operation is actually very clever and profitable for the bank because it makes the customer more captive,” explains Astrid Cousin. It is more difficult for him subsequently to find an equivalent offer at such a competitive price and therefore to use the delegation to change insurance ”. And to cite the example of a young couple of 35 years old who benefit from a package billed only 0.5%. Difficult for brokers to align with such rates… "Few of our partners offer this guarantee for job loss because it is expensive and increases the level of debt," adds Philippe Taboret, who rarely recommends it.

"At the average rate of 0.3% on a loan of 220,000 euros over twenty years, it will cost 13,200 euros, or 55 euros / month to the borrower, it is too much, calculates Maël Bernier, spokesperson of the Meilleurtaux comparator. To this are added drastic conditions: a lump sum payment or limited in time

(Editor's note: 24 to 36 months maximum up to 62 years)

and subject to a waiting period of 3 to 12 months depending on the contracts ... In short, better worth without! ".