What is credit insurance and should you refuse it

What is credit insurance

Usually, this is understood as the conclusion of an agreement under which the insurance company will repay the borrower's debt to the bank in the event of an insured event. Which one depends on the content of the document. Most often we are talking about the life and health of the debtor. Accordingly, he can apply for payments in the following cases:

• death (here the recipient will already be the family, which inherits the debts too);
• temporary disability due to illness or accident;
• disability due to disability.

Insurance products can be different and protect, for example, from job loss or other life troubles.

But these are not all insurances that may accompany a loan. For example, loans for new cars usually imply comprehensive insurance, that is, the maximum insurance of the car against damage and theft. Sometimes banks agree to get by with compulsory OSAGO, but this increases the risk for them that the client will not return the money. Mortgages are often accompanied by home damage insurance, a little less often by title insurance. The latter will come in handy if the transaction is invalidated due to, for example, inheritance disputes or fraud with an apartment in the past. In general, the bank decides for itself which set of insurances it wants to see.

Therefore, talking about loan insurance and especially when making out a loan, you need to understand what kind of contract you are entering into, whether you need it and whether it will protect you in a disputable situation.

Is the loan insurance compulsory

Those who take out mortgages mustFederal Law of July 16, 1998 N 102-FZ insure the object against the risks of loss and damage. But a mortgage does not necessarily mean that you bought a home on credit and live in it. You can take such a loan and on the security of existing real estate - for example, to receive money for a business, and as a guarantee to provide an apartment. In this case, it also needs to be insured.

In other cases, the policy is issued only voluntarily. Banks are prohibitedFederal Law of December 21, 2013 N 353-FZ impose this service, calling it mandatory. Moreover, the employee shouldReview of the practice of consideration by courts of disputes arising from relations on voluntary personal insurance related to the provision of a consumer loan inform that you can refuse insurance or, if you wish, contact any organization accredited by the bank, and not just the bank's “daughter”. And also tell in detail about the actual spending on the policy.

What happens if you refuse credit insurance

In general, it's okay. But some consequences are possible.

You may be denied a loan

The bank is not obliged to explain why it does not give you money. After all, there are many additional parametersby which they evaluate the borrower.

You will be offered less favorable loan conditions

Doing so does not prohibit the law. The bank is obligedFederal Law of December 21, 2013 N 353-FZ offer the client a comparable option available without insurance. That is, the difference will not be dramatic. In practice, it can be 1–2%.

The rate may increase depending on the availability of the policy. Let's say you took out insurance for a year and received a low interest rate. But you have a loan for five years. If after 12 months you do not renew the policy, the rate may increase - but this should also be spelled out in the loan agreement.

What to do if you want to cancel your insurance

It happens that you succumbed to the persuasion of a bank employee and received a policy. Or read inattentively the loan agreement and signed not only under it, but also under the document for registration of insurance. In this case, you can return the money.

By law, you have such a right, but only for 14Bank of Russia Ordinance No. N 3854-U days. This is the so-called cooling period, when you can weigh the pros and cons and change your mind. It is allowed to cancel the policy only if the insured event has not occurred and we are talking about voluntary insurance. For example, it is not necessary to insure life and health when lending. Such a policy can be returned.

Before you refuse insurance, carefully re-read the loan agreement and find out what consequences you may face. For example, the percentage will increase for you. Or, let's say, it turns out that the refusal of insurance violates the terms of the contract. Then you have to pay off the debt ahead of schedule.

To refuse insurance, write a free-form application and state your intention. Indicate how you want to receive the money. And add details if you choose a translation. Attach a copy of the policy to the refusal, passports, check for payment. It is better to print the application in two copies - on your own, ask the insurance employee to put a mark that they have registered the appeal.

The company has 10 working days for a refund. If the contract has already begun to operate, money will be deducted from the amount in proportion to the elapsed period.

When problems arise, you can complain to Rospotrebnazor and the Central Bank. The first deals with consumer rights, the second monitors insurance companies.

How to return part of the insurance if you paid off the loan ahead of schedule

It happens that the borrower is not against insurance and draws up a policy for the entire time that will transfer money to the bank. And then he pays the debt ahead of schedule, and it turns out that part of the amount was wasted. From 2020, insurance companies are required toFederal Law of December 27, 2019 N 483-FZ return the remainder of the policy costs. True, there are nuances:

• The insurance contract must be concluded after August 31, 2020.
• This is voluntary insurance.
• It was issued upon receipt of a loan.
• The insured event did not occur and there were no insurance payments.

To return part of the money, you need to submit an insurance application and documents confirming your relationship - everything is the same as in the previous paragraph. Only the insurance company will have 7 working days to get the money back.

When to Consider Credit Insurance

It is possible not to take out insurance or refuse it, but it is not always worth doing it. For example, if the loan is large and for many years, and it allows you to reduce the interest. Policy costs can help save on overpayments. Especially when annuity payments, when the entire amount with interest is divided into equal parts - according to the number of months of the loan. At the same time, the structure of the payment is not the same: in the first years, most of it is interest.

Let's see how much you can save with an example. Let's take a loan of 1.5 million for 15 years at a rate of 9% without insurance or 8%, but with insurance, which will cost 10 thousand rubles per year. In the first case, the overpayment for the first 12 months will be 133 thousand rubles, in the second - 118 thousand. Even taking into account the cost of insurance, the benefit will be 5 thousand.

Even with a large multi-year loan, it will not hurt to think about an airbag. If something happens to the borrower, his relatives are at risk inherit not only property, but also debts. And it's better to grieve if you are financially protected. In the event of a serious illness, there will also be no time to pay off the loan. At the same time, the bank is unlikely to enter the situation, it is a commercial structure. So it will be nice to pay off the debt through insurance.

Therefore, if you take a loan and we are talking about insurance, do not cut it off, count everything and make an informed decision. Just read the contract carefully so that the policy really works, and does not turn out to be just a piece of paper.

What to do if an insured event occurs

It is best to find out the targeting algorithm on the website of your insurance company. There you will find a list of documents that you need to collect in order to confirm the incident. Then it must be sent along with the application to the insurer.

As notedWhy was my complaint against an insurance organization sent for consideration to another territorial subdivision of the Bank of Russia? The Bank of Russia, the procedure for considering applications is determined by the internal documents of the insurer. So it is better to look for the response time in your contract. But no one will forbid you to complain about the company's inaction if it seems to you that they are delaying the answer. You can contact the financial officer, including online.