Several people are concerned by a loan insurance contract:
- the insured, who borrows and must cover his loan
- the banker who lends the money to the insured
- the insurer, which may be external to the lending institution
The tripartite contract
The insured is the person who is covered for the risks covered by the contract (death, disability, disability). He is usually the underwriter of the loan insurance contract. The beneficiary of the contract is the financial institution that receives the repayment of the capital in the event of a risk covered and borne by the insurer.
The group insurance contract
Group insurance is a group insurance offered to the borrower by a lending institution and negotiated by the lending institution with an insurance company. This insurance distributes risks among its various subscribers, clients of the lending institution. It has a single rate set by age and has limits (age, state of health, occupation or amount borrowed). When the borrower does not fall within the criteria of this insurance, he can obtain the assumption of the guarantees of the contract by paying a premium.
The banker’s duty to inform
The banker is required to deliver clear and precise information to the borrower by providing him with information notice defining the risks that are guaranteed.