Should he take out unemployment insurance during a mortgage loan?

Should he take out unemployment insurance during a mortgage loan?


The unemployment insurance loan insurance

insurance loan

Unemployment insurance is an optional guarantee of a loan insurance contract. It allows the reimbursement of monthly loan payments by the insurer during a period of unemployment of the insured. This guarantee, however, is accessible only to specific borrower profiles and intervenes only during well-defined periods.

Although optional, unemployment insurance or job loss guarantee is often recommended and may be required by some lending institutions.

How does the unemployment guarantee work?

The unemployment guarantee allows the repayment of your monthly loan payments in case of job loss. This means that you are protected during your period of professional inactivity and the bank is certain to be reimbursed.

Simulation, Quote and Comparison of Credit Insurance

Simulation, Quote and Comparison of Credit Insurance


Deadlines to check the duration of the unemployment guarantee


Most contracts have a duration ranging from 1 to 4 years and are renewable by tacit agreement. It is important to take into account the date of renewal because if you want to proceed to a cancellation or renegotiation of your contract, you must send your insurance company a registered letter with AR, at least 1 month before the date of renewal. It is worth remembering that insurance can only be terminated at the end of the repayment of the credit, in the event of early repayment, retirement or if the age limit has been reached by the insured.

The waiting period

The waiting period is a period during which, as a result of a loss of employment, the insured must wait before the insurer compensates him. According to the insurance companies, this period can be 6, 9 or 12 months.

The franchise period

Can vary on average from 3 to 6 months, the franchise period is the period during which the monthly payments are not covered by the insurer. It is at the end of this period that insurance comes into play.

Conditions of subscription of the unemployment guarantee

Compared to the other guarantees of a loan insurance contract, the conditions of access to the unemployment guarantee are rather restrictive. To claim it, it is indeed necessary to:

  • Work on an Undated Contract
  • Justify certain seniority in the company (from 6 to 12 months)
  • Not to be on probation, a notice of dismissal or resignation
  • To be entitled to the unemployment benefits(or other assimilated organization)
  • Do not exceed a certain age (usually ranges from 55 to 65 years)

The repayment terms

The compensation system may vary from one organization to another and also depending on the length of your unemployment spell. Reimbursement by the insurer only occurs for a limited period of time, which can vary from 18 to 48 months. It is good to know that many insurers limit to 3 the number of consecutive unemployment periods.

Depending on your contract, the amount of compensation can vary from 50 to 100% of the amount of the monthly loan. But be aware that some contracts allow only a postponement of repayment deadlines at the end of credit, which then extends its repayment.