Borrower insurance: Understanding the job loss guarantee


Borrower insurance may include job loss cover (Photo credits: Unsplash – Jonas Allert)

Backed by a mortgage, borrower insurance covers the risk of death but also of disability and incapacity. It is also possible to supplement your coverage by taking out specific cover for loss of employment. Explanations.

What is the job loss guarantee?

The job loss guarantee, also called unemployment guarantee, is intended to be triggered to take over the repayment of your mortgage if you lose your job.

Depending on the conditions provided for in the contract, if you lose your job, your borrower insurance covers either a percentage of your installments or a capped amount.

Who can take out job loss cover?

The principle of insurance is to cover a potential risk and not a certain risk. Consequently, the conditions of access to the job loss guarantee are rather restrictive.

This additional guarantee is only intended for salaried borrowers on permanent contracts and outside the trial period.

Some companies go even further by requiring a minimum seniority, for example 6 or 12 months, in the company. The following are therefore de facto excluded:

  • Employees on permanent contracts but still on probation

  • Employees on permanent contracts doing their notice

  • Non-Salaried Workers (TNS) such as craftsmen, traders or the liberal professions

  • Employees on fixed-term contracts

What are the limits of the job loss guarantee?

Many companies set an age limit to be able to take out job loss cover, most often between 50 and 65 years old. Check this point in the general conditions of the contract.

For example, the home loan insurance offered by Boursorama to its customers provides that to benefit from the clause covering the loss of employment, the borrower must subscribe to it before his 50th birthday.

In addition, this guarantee only covers “voluntary loss of employment”, without the Insurance Code listing the specific situations.

Depending on the conditions specific to each company, certain situations are therefore excluded from the scope of this guarantee: Most of the time, redundancy for economic reasons is covered while contractual terminations, resignations or dismissals for fault are not covered.

It is therefore essential to read the general conditions carefully before taking out job loss cover.

Be more attentive to the limits of your cover in terms of deficiency and deductible.

For example, if the job loss guarantee of your home loan insurance provides for a deficiency of 12 months and 90 days of deductible, this means that you will only be covered if the dismissal takes place from the 13th month from the subscription. of the contract and that in this case, the guarantee will only be activated from the 91st day from the date of your loss of employment.

Stephanne Coignard ([email protected])

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