A mortgage loan issued against the security of real estate has a long repayment period: from 5 to 30 years. And the bank that issued it quite rightly wants to protect itself from possible financial losses that various circumstances can lead to. That is the purpose of mortgage insurance.

What it is

To date, the conclusion of an agreement on issuing a loan for the purchase of housing on the terms of a mortgage provides for several types of insurance:

• insurance of the subject of pledge (mortgage);
• personal insurance (health and life) of the borrower;
• insurance of the risk of loss of possession (title);
• liability insurance of the borrower in case of non-repayment of the loan.

The main purpose of all types of insurance accompanying the conclusion of a loan agreement and a mortgage agreement is, first of all, the redistribution of risks associated with a long debt repayment period.

The second goal that was set when creating a system of mortgage insurance in our country is to make mortgages more affordable, to reduce the down payment and interest.

It is assumed that this will allow a large number of people who want to solve their housing problems without resorting to government assistance.

Who benefits from it

Insurance of the subject of mortgage is beneficial for the bank. After all, it is he who, until the end of the payment period, owns the property under pledge. Therefore, the destruction or reduction in the value of this property as a result of damage is unprofitable for him.

The bank can protect itself from such financial losses by insuring the real estate it has as a pledge.

Life and health insurance is most beneficial for the borrower himself. After all, many diseases or injuries lead to disability, that is, a source of income.

And the amount that will be paid by the insurance company will allow you to pay off the debt to the bank. In the event of the death of the borrower, his heirs will also be able to repay the loan from the insurance funds.

Title insurance is also beneficial to the borrower. But only if he is a bona fide purchaser.

That is, if it turns out that the acquisition of real estate occurred with violations through no fault of the buyer, then he will be protected from financial losses associated with the loss of his rights.

But the borrower's liability insurance is beneficial to both sides of the relationship associated with the loan. The bank is protected from losses if, after the sale of the mortgaged apartment, it has not received the full amount of the debt.

And the borrower receives the following benefits:

• lower down payment;
• lower interest rate;
• absence of bank claims in case of termination of payments and sale of the mortgaged apartment, even if these funds are not enough to pay off the entire debt in full.

Is mortgage insurance mandatory or not?

The law obliges to insure only the subject of pledge - an apartment or other real estate. Even if the insurance clause is not included in the loan agreement, the borrower-mortgagor is obliged to insure the property transferred to the mortgage.

In practice, the loan will not be issued without an insurance policy. The term of such insurance coincides with the term of the loan. After its repayment and removal of the encumbrance, the obligation to insure your property turns into a right that you may not use in the future.

The amount of insurance cannot be less than the amount issued under the loan agreement. Most often this is the amount of the loan and 10% on top.

But many property owners prefer to insure their home for its full value. This will allow not only to cover the debt to the bank, but also to receive the balance of the amount in hand, if such a need nevertheless arises.

Voluntary

But all other types of mortgage insurance are voluntary. And if the bank tries to impose them on the borrower by including them in the contract, then it is acting in violation of the provisions of the law. Although you can understand the interest of the bank. He wants to protect himself from as many risks as possible.

Title insurance is valid during the statute of limitations for these transactions, i.e. 3 years. This insurance is especially relevant for buyers in the secondary market, where there is a possibility of being embroiled in litigation for violation of the rights of third parties.

But even on the market for new buildings, violations and fraudulent schemes are not uncommon, which can lead to the recognition of the transaction as invalid, with all the not-too-pleasant consequences.

The borrower's liability insurance is strongly recommended not only by banks and insurance companies, but also by the legislator.

Since loans insured in this way are regarded by the bank as more reliable, it does not need to shift its risk of not receiving the full amount to other borrowers. Therefore, you can set a lower percentage and reduce the down payment to 10%.

Legal basis

The main provisions relating to mortgage insurance are set out in the Mortgage Law, which regulates all parties to this legal relationship (dated 16.07.1998).

It was Article 31, dedicated to insurance, that was amended in June 2014. The same article establishes the obligation to insure real estate pledged.

You can refuse voluntary insurance by referring to the law "On Mortgage", which states that the borrower has the right, but is not obliged to insure his liability.

And in the case of insistent requirements of the bank, you can refer to the law, which expressly prohibits the imposition of additional goods or paid services.

What are the features

Since all types of mortgage loan insurance are independent, it is possible to arrange each of them separately.

But in practice, most often a single contract is concluded, which includes all the conditions relating to both personal insurance and property and liability insurance. Such a complex product is offered by many banks.

The advantage of such a contract is that it will cost less than four separate ones. But it is worth remembering that insurance is an individual product.

Its terms will be different for each borrower. The cost of insurance will be affected by the age and profession of the borrower, the characteristics of the purchased housing, the loan amount and the term of the contract.

But, as a rule, it is about 1-1.5% of the cost of the loan. In rare cases, the value may be less or more.

The peculiarity of borrower liability insurance is that it does not eliminate the risk of being left homeless in case of default on the loan.

But on the other hand, it allows you to avoid additional financial requirements if, after the sale of the apartment at auction, the proceeds, for various reasons, turned out to be less than the loan debt. The missing funds will be paid to the bank by the insurance company that signed the contract.

What to do if there is not enough money to pay off the debt in case of an insured event

Bankers assures that this cannot happen. Before carrying out the next calculation, the insurance company must find out how much the amount of debt is. At the same time, the bank does not allow any part of the debt to be “not covered” by an insurance policy.

Company refusal to pay

In this case, you need to apply to the arbitration court. You must know that the bank will be on your side. But it’s worth wondering only if you didn’t conceal the fact due to which the insured event occurred when applying for insurance. In this case, the court will be on the side of the insurance company.

What are the risks

Different types of mortgage insurance seek to minimize the effects of different risks. In this case, the list of insured events, as well as the amount of payment, will be clearly defined by the contract. Let's consider them in more detail.

When insuring real estate pledged, first of all, the risk of destruction or damage to the dwelling as a result of a fire, natural or man-made disaster, technological errors or deliberate actions of third parties is taken into account.

If the property is damaged, the compensation is paid to the borrower. Of course, only if he is not involved in the occurrence of the insured event.

But if the housing was completely lost, then the bank will receive an insurance payment in the amount of the loan balance. The borrower's personal insurance risks will be his death or disability (I and II groups).

If this event occurred during the validity period of the contract, then the insurance company is obliged to repay the debt and interest on the loan.

The mortgaged housing will be released from the encumbrance and will become the property of the borrower, and in the event of his death - the heirs.

Title insurance considers a court decision on the loss of ownership of housing under bail as a risk. The risk that the loan will not be repaid due to various circumstances is insured as the responsibility of the borrower.

In this case, even if the sale of mortgaged housing does not cover the debt, the insurance company repays it. For the bank, this is the risk of financial loss in case of default on obligations under the contract.

Where can I apply

Despite the fact that today many companies offer mortgage insurance services, they all have obligations with the AHML Agency.

This structure, created by the Government to develop the mortgage lending system in Russia, acts as a reinsurer under borrower liability insurance contracts.

Therefore, it is best to choose one of the insurance companies that are official partners of AHML. Their list is presented on the website of the Agency.

Large banks that implement mortgage programs, as a rule, have their own recommendations for choosing an insurer that coincide with the AHML list.

Banks prefer to deal with well-known and large participants in the insurance market, so they often do not agree to the candidate proposed by the borrower, so it is desirable to reach an agreement on this issue.

Refusal to conclude an insurance contract may result in a demand for the return of the entire remaining amount. These conditions are stipulated in the loan agreement.

Mortgage insurance is not the bank's desire to get as much as possible. This is a very useful and effective tool to protect the interests and reduce the risk of financial losses, both for the lender and for the borrower. In addition, it is insurance that makes mortgages more affordable.

Video: IncomePoint.tv: mortgage insurance

Mortgage life and health insurance- Another type of insurance that you can be offered with a mortgage. Many borrowers rightly ask the question: Is mortgage life insurance required? And is it legal for banks to impose it at all?

The answer to it is already spelled out in the law - mandatory when buying a home on credit is ONLY insurance of the collateral (ie apartments, houses, townhouses, rooms, etc.). Life and health insurance is voluntary.

However, almost all mortgage programs provide for an increase in the interest rate on mortgages when life insurance is waived. Here you already need to consider how it is more profitable to take a mortgage. It often turns out that a mortgage with insurance is more economical than a loan at a higher interest rate. Do not forget that the refusal of insurance may result in the refusal of the bank without explanation.

What does mortgage life insurance provide?

A mortgage is a long-term loan, so banks try to minimize their risks as much as possible. But life and health insurance also gives the borrower confidence in the future, so before you refuse insurance, you need to know exactly what risks it covers and how it works.

Insured events in life insurance:

Injuries resulting in disability

Disability 1 and 2 groups

If one of these circumstances occurs, the insurance company covers the bank's losses, while the apartment or other housing remains in your property or in the property of the family.

In the event of an insured event, you need to notify the bank by providing a medical certificate or death certificate.

Life and health insurance, unlike title insurance, is valid for the entire term of the mortgage loan. Payment of insurance occurs once a year and is a certain percentage of the balance of the debt, that is, every year the amount of the contribution decreases.

If you attracted co-borrowers and guarantors, then your life insurance does not apply to them and they need to take out life insurance separately!

Mortgage life insurance: cost and where is it cheaper?

Calculation of the life insurance rate for a mortgage happens strictly individually! The range of interest rates for insurance is wide: from 0.5% to 2.5% of the mortgage debt. Given that a mortgage loan is valued in hundreds of thousands and millions, even one percentage point is a serious overpayment or savings.

Each bank works with several insurance companies, so you can see all the rates and choose the one that is cheaper. It is better to communicate with specialists personally (although there are special calculators on the websites of insurance companies), since the cost of life insurance is calculated taking into account many parameters.

How is mortgage life insurance calculated?

The increase in the rate of life insurance rates for mortgages occurs under the influence of the following factors:

Age (the older the borrower, the higher the percentage)

Presence of chronic diseases (medical examination required)

For men, the rate is higher due to lower life expectancy

If you work in a hazardous occupation or in hazardous conditions

With a large loan amount and a long mortgage term

The presence of bad habits, non-standard ratio of height and weight

Important! Do not try to hide the presence of diseases from the insurance company, if this fact becomes clear during the occurrence of an insured event, then you or your relatives will be denied reimbursement.

Mortgage life and health insurance refund or waiver

As mentioned above, the refusal of insurance entails an increase in the bank's interest rate from 0.5% to 3.5%. Therefore, when refusing insurance, you need to calculate the benefits or losses for various mortgage programs.

One of the categories of borrowers who refuse insurance are the military life and health of which is already insured by occupation. However, with a military mortgage, the bank still offers to issue a policy, since in this case the insurance covers the damage to the bank, and in the first case, the borrower or relatives receive compensation.

If you have already taken out insurance, but suddenly realized that you are overpaying, then you can return the mortgage life insurance policy within a few days (be sure to read the terms of the return in the agreement).

A separate point in the calculation of insurance is the partial early or full repayment of the mortgage. You need to contact the insurer to recalculate the annual payment or to return unused funds, upon full repayment.

There are pitfalls here, READ THE CONTRACT: in some cases, insurance companies do not provide for early termination of insurance. It is very important to clarify this point at the stage of issuing a policy.

Mortgage life insurance return is practically impossible if the bank was the insured (for example, when buying an insurance package). In this case, you do not conclude an agreement with an insurance company, but only with a bank. Accordingly, when returning part of the funds or completely canceling the policy, you need to communicate directly with the bank. Since the insurance contract is concluded between two legal entities, and not with you, these relations are governed by other rules of law. In this case, it is extremely difficult to obtain compensation even through the courts.

You need to know about such nuances of life and health insurance with a mortgage in advance and carefully study all signed documents.

Mortgage life insurance tax deduction

By law, each taxpayer can return the tax deduction for voluntary insurance. You can return 13% not only from the amount of personal insurance, but also from the amount of the spouse (who is a co-borrower with a mortgage).

Conditions under which a deduction is made:

The term of the contract is 5 or more years (some insurance companies enter into a new contract annually, with such a policy it will not be possible to return interest)

The insurance company has a license for this type of activity

The borrower paid for the insurance from his own savings.

The amount insured is specified in the contract in a separate column

The borrower has a document confirming the payment of insurance premiums

The borrower is a taxpayer and a citizen of the Russian Federation

The maximum amount for the return of insurance for the year is fixed and amounts to 120,000 rubles. That is, from this amount, 13% will be returned to you

Get a tax deduction for mortgage life insurance CANNOT: students, military, foreigners, orphans under 24 years old, people who live on income from folk crafts

Documents for issuing a policy

• Application for insurance

  mortgage agreement

  Health certificate (if required)

Mortgage lending is now a fairly common way to purchase your own home. Each borrower has already encountered or heard about insurance with such a loan. Sometimes this turns out to be an unpleasant surprise, as it forces the client to fork out additionally. However, although mortgage life and health insurance is not mandatory, according to most experts, it serves as a “safety cushion” for both the borrower and the bank.

A life insurance policy for a mortgage obliges the insurance company to pay the mortgage debt in the event of an insured event with the borrower. Repayment can be partial or full.

Expert opinion

One of the inexpensive and reliable insurance companies in 2019 is Ingosstrakh. The list of services provided by the company also includes mortgage life insurance. You can familiarize yourself with the conditions and apply for insurance on the official website of Ingosstrakh.

That is, this insurance covers certain risks, namely:

1. Death of the borrower. In this case, it is necessary to apply to the insurance company during the term of the contract, but not later than 1 year from the date of the fatal accident or illness.
2. Obtaining a disability of 1 or 2 groups. You should contact the insurer no later than six months after the end of the insurance contract.
3. Sick leave for more than 30 days. Depending on the insurance company, the payment is made either immediately or after the sick leave is closed.

In the first two cases, the insurance company pays the entire amount of the current debt. And with a long sick leave, the calculation is made daily at 1/30 of the loan payment. Life insurance gives the borrower a guarantee that in the event of a loss of working capacity, the insurance company will continue to pay his debt, and no debt will arise.

Important point: there may be situations when, after the disability insurance payment, the borrower died. Then there are no more payments. And if at first the client was on sick leave and the insurance company transferred loan payments to the bank, and then disability set in, then payments are due for it. But sick leave payments will be deducted from the total amount.

To insure a co-borrower and be eligible to receive payments, it is required to take out the same life insurance policy for him. Otherwise, if an insured event occurs with the co-borrower, the credit debt will not decrease, and will completely fall on the shoulders of the borrower.

It is important for the borrower to know that the insurance company may refuse to pay in the following cases:

1. The insured person has AIDS or HIV and is registered with a dispensary.
2. In case of suicide (except for the case of incitement to suicide, which must be established by the court).
3. If, according to the analysis of the blood of the deceased, it is determined that he used alcohol, narcotic substances.
4. The insured person drove the vehicle without having the right to drive it.
5. The insured event occurred in the course of the crime and this was proved by the court.
6. The presence of a serious chronic disease at the stage of concluding an insurance contract, which the borrower hid.

Any of the above circumstances will lead to the fact that the insurance company will not close the debt to the bank. As a result, the borrower or his heirs (if they inherit) will have to pay off the mortgage.

Expert opinion

Alexander Nikolaevich Grigoriev

Mortgage expert with 10 years of experience. He is the head of the mortgage department at a major bank, with over 500 successfully approved mortgage loans.

Events such as the loss of a job, the death of a close relative (including a co-borrower, if a separate policy was not issued for him), salary delays cannot serve as a basis for contacting an insurance company. In these cases, the borrower should contact the bank directly for a possible loan restructuring, if necessary.

For the bank, this type of insurance is important because of the large credit debt, besides, mortgage loans are characterized by a long term. No one can say with certainty what will happen to the client after a given period of time and whether he will be able to pay the mortgage.

The lack of insurance can lead to lengthy litigation in the future, and the bank is not always able to return the loan. There are many nuances in such disputes, in particular, it is impossible to take away the only housing from the borrower. Thus, for a bank, a life insurance policy serves as an additional guarantee that the money will be returned in any case.

Is life insurance required when taking out a mortgage?

The question of whether it is mandatory to take out life insurance with a mortgage is very relevant, especially if insurance payments are high. According to Federal Law No. 102 "On Mortgage" it is voluntary. Therefore, the bank cannot oblige the client to take out an insurance policy.

However, due to the increase in its risks, the bank may offer the borrower other, more stringent lending conditions. In particular, increase the interest rate, reduce the term, request a guarantee, etc.

In general, there are three types of mortgage insurance:

1. Mortgage property insurance. It is required by law. The property is insured against destruction and external damage (eg earthquake, house collapse) for the entire loan term. For insurance of interior decoration and interior items, it is necessary to include this in the contract as a separate clause.
2. Health and life insurance. Upon the occurrence of an insured event at any term of the loan agreement, the entire balance of the debt or part of it is assumed by the insurance company.
3. Title insurance. If in the past there were contentious issues about ownership of mortgage real estate, then after the conclusion of the loan agreement, “unexpected guests” are possible in the form of applicants for the borrower's property. Title insurance just protects the interests of the bank in case of loss of ownership of the client. In addition, the borrower can also take out separate title insurance for himself to have a “safety cushion” in the form of payments from the insurance company if the property is legally unclean. The validity period of such agreements is always no more than 3 years, since after that, according to the law, all property disputes are not accepted by the courts. This mortgage insurance is not required, but the bank may require it if the property being purchased is in doubt.

Read also other articles from our experts:

Where is it better to take a mortgage in 2019, which banks have the most favorable conditions, and how to make your mortgage as profitable as possible -.

When selling an apartment on a mortgage, you will definitely come across such a procedure as real estate appraisal. Why is it needed and how does it go, the essence of the procedure and the main features that you will encounter in the article at this link.

3 reasons to buy insurance

For the borrower, life and health insurance will ease his situation in case of possible force majeure. Otherwise, with partial or complete disability, you will have to solve the issue with a loan only on your own. The issued insurance policy allows you to count on a number of preferences from banks.

Of these, 3 main benefits for the borrower can be distinguished:

1. Reduced percentage.
2. No requirement for a mandatory guarantee.
3. Smaller down payment.

Of course, there are banks that offer mortgages without mentioning life insurance at all. But the decision in any case remains with the borrower. Tempting offers often hide higher commissions and interest, because in the absence of insurance, the bank has to reduce its risks in other ways. We advise you to take out a mortgage loan with life and health insurance, especially with a long repayment period.

Expert opinion

Alexander Nikolaevich Grigoriev

Mortgage expert with 10 years of experience. He is the head of the mortgage department at a major bank, with over 500 successfully approved mortgage loans.

Refusal of life insurance entails an increase in the interest rate on mortgages by 0.5-3.5% in different banks. More stringent requirements are put forward for the borrower, sometimes reducing the maximum possible loan amount, which does not suit all customers.

When choosing an insurance company, bank managers can persistently suggest a particular insurer. This is due to the incompetence of individual employees or due to the need to fulfill the plan for additional services. Meanwhile, the borrower can insure in any insurance company that meets the requirements of the bank, that is, accredited in it.

We recommend comparing the conditions and cost of insurance in several companies - the difference can sometimes be noticeable. Insurance at the bank is most often more expensive, but it can also be the other way around when the client is offered suitable conditions as part of special promotions or due to long-term cooperation with him.

The life and health of military personnel and some other categories of borrowers may already be insured. But to refuse such insurance in the bank still does not work. The fact is that under this insurance, the borrower himself or his relatives receive the payment, and the money may not be used to pay off the mortgage. The bank also needs to be the beneficiary (that is, the recipient of the insurance payment).

Where do mortgage insurance - top 5 companies

Consider the conditions of 5 popular insurance companies in which you can insure life and health for a mortgage. The comparison uses data from the reputable rating agency Expert RA (raexpert.ru) from the financial reliability rating of insurance companies providing life insurance services.

Ingosstrakh

One of the largest and well-known companies in the Russian market. Rating agency "Expert RA" characterizes Ingosstrakh with high creditworthiness, financial reliability and stability (ruAA).

The organization has attractive mortgage insurance offers. There are Ingosstrakh offices even in small towns and villages. The site has a special calculator that will help calculate the cost of insurance based on various conditions.

After the calculation, the client will be offered to issue an insurance policy and pay for it online without leaving home. After payment, a letter with a policy certified by an electronic signature will be sent to your e-mail. The client only needs to sign it on his part.

Life and health insurance in Ingosstrakh has the following advantages:

1. Large, stable and solvent company.
2. Wide distribution in regions, small towns.
3. Discounts for online registration. For example, for Sberbank customers, the organization provides a 15% discount when applying for a policy online.
4. There is a convenient calculator for calculating the cost of insurance.

Insurance Calculator

You can calculate insurance on a special Ingosstrakh calculator, and apply for it online, directly on our website or on the website of the insurance company at this link.

For example, the annual cost of life insurance and disability insurance for a female borrower aged 35, for a mortgage taken from Sberbank at 10% for an apartment with registered ownership, with a balance of debt of 1,500,000 rubles, will cost 5,211 rubles (with a 15% discount) .

Calculate the cost of life insurance in Ingosstrakh

VSK Insurance House

A fairly large and well-known company with a moderately high level of reliability and financial stability (ruA +) according to the Expert RA rating agency.

It occupies the 7th place in terms of collections in the life insurance niche. The regional network has more than 500 branches and offices throughout the country. It is possible to apply for a policy online, but the rates are quite high.

Calculate the cost of insurance in VSK. The conditions are the same as in the previous example. The cost of insurance under the Protected Borrower program will be 5,100 rubles. However, the amount is not final and may change upwards when specifying additional data (weight, place of work, etc.) when filling out the questionnaire.

RESO Guarantee

The organization is engaged in voluntary insurance against accidents and diseases, life insurance. The company's reliability rating, according to the Expert RA agency, ruAA+. An organization with a high level of reliability, creditworthiness and financial stability.

RESO-Garantia is a member of the All-Russian Union of Insurers and the Federal Self-Regulatory Union of Insurance Organizations. It is the only company that insures clients over 60 years of age. The official website has a handy cost calculator.

Having calculated the cost of insurance on a calculator with the same conditions, we get the amount of 3,555 rubles. The amount may change when you specify additional data for the execution of the policy. For Sberbank, the result is not valid, the cost will be higher.

Calculation of insurance in RESO guarantee

Sberbank life insurance

A subsidiary of Sberbank of Russia, was created to insure the life of its borrowers. The tariff line includes the “Protected Borrower” offer for mortgage clients. Allows you to reduce the Sberbank mortgage rate by 1%.

The Expert RA agency characterizes the company with the highest level of creditworthiness, financial reliability and stability (ruAAA). The rating outlook is stable.

Among the advantages, we highlight the reliability and stability of the company, the possibility of issuing a policy on the official website online with a 10% discount. The maximum debt balance is 1,500,000 rubles, if the amount is more, insurance is issued at a bank branch.

The downside is the high cost of the policy - 30-40% higher than that of other accredited insurers. The calculation on the Sberbank website shows that the cost of insurance under the same conditions will be 5,160 rubles.

The cost of life insurance in Sberbank

SOGAZ Life

Subsidiary of Gazprom and Rossiya Bank. A serious company with the highest level of financial reliability and stability according to Expert RA (ruAAA rating). It mainly accepts mortgage clients of Gazprombank, who have practically no chance of insuring themselves in another organization.

The company is actively developing classic long-term life insurance primarily for corporate clients, bank life insurance for borrowers, cooperating with banks, and long-term life insurance for individuals who are not employees of partner companies.

The basic life insurance rate for Sberbank is 0.21%. With an insured amount of 1,500,000 rubles, the cost of the policy for 1 year will be:

1,500,000 / 100% * 0.21 = 3150 rubles.

One of the most inexpensive options for Sberbank.

How much does mortgage life insurance cost and why can it rise in price?

On average, life insurance will cost the borrower 0.5–1.5% of the mortgage debt. The policy is usually issued for 1 year and extended for the next. With a decrease in the amount of debt, the amount of insurance will also decrease. The borrower also has the right to change the insurance company.

The cost of the policy and the tariff for each borrower is determined by a weighted assessment of a combination of factors:

1. Floor. For men, the risk for this factor is higher, so when there is a choice of whom to put as a borrower and who as a co-borrower, it is better to put a woman in the first place. The policy will cost 30-50% cheaper. However, there are companies that do not attach significant importance to gender when withdrawing the final amount for an insurance policy.
2. Age. Older people have a higher risk of death or illness, and therefore the tariff for them is higher. The difference in rates between a 25 year old and a 50 year old client can be 5-10 times. Borrowers over the age of 60 are generally denied life insurance.
3. The presence of chronic diseases. They increase the cost of insurance.
4. General health. A medical certificate is required from the client. Any deviations to one degree or another affect the multiplying factor. Therefore, most clients prefer to remain silent about illnesses. We recommend that you do not hide the truth from the insurer, since concealment of illnesses can serve as a basis for refusing an insurance payment.
5. Excess weight. Insurance will definitely be higher for borrowers with a greater weight.
6. Profession. The more risky and dangerous it is, the higher the tariff will be. The risk of an accountant and an employee of the Ministry of Emergency Situations differs significantly. It is generally difficult for the latter to find a company that will agree to insurance.
7. The presence on hand of an already existing life insurance policy, where the beneficiary is not a bank. It is not taken into account by all credit institutions, but it will not be superfluous to provide it.
8. Amount of credit. The higher it is, the more multiplying coefficients are used by insurance companies.
9. Commission of the bank. Some banks cooperate with insurance companies and take a commission for attracted customers. Some want 20-50% of the cost of the policy from the insurer, others do not earn money on this at all, it all depends on the bank.

How much life insurance will cost is determined and taking into account the nuances of a particular insurance company. Marital status, the presence of children, other debt obligations, property, etc. can be taken into account.

Comprehensive insurance (life, title and bond) is usually cheaper. Borrowers should be warned to take out a life insurance policy before the mortgage is approved. Otherwise, if the bank refuses, it will be impossible to return the money paid.

Having taken an apartment on a mortgage, the borrower must be aware that within 15-20 years he will have to pay certain amounts to the bank. And it will not matter the loss of work, health and other circumstances that may lead to insolvency.

Many perceive the insurance that the bank requires as an increase in the cost of a loan, without thinking about what, in fact, is protection. And not so much the interests of the bank, but the borrower himself.

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What is mortgage insurance?

By issuing a long-term loan for the purchase of real estate secured by its security (mortgage), banks require this property to be insured.

Moreover, not only the subject of pledge.

In order to minimize its own risks, the bank expresses a wish for life and health insurance, as well as the risk of loss of ownership of the pledged property (title insurance).

At the time of the birth of mortgage lending in our country, insurers developed complex product, which included: property insurance (which includes title insurance) and life insurance.

Now insurance companies offer comprehensive mortgage insurance, which includes all three types of insurance required by banks.

The property is insured against all risks, including from a terrorist act, which is not included in the list of insured events in a regular contract.

Mortgage apartment insurance does not cover the home contents of the insured, unless he voluntarily included them.

Life insurance includes the risk of death for any reason and the onset of disability of groups 1 and 2 as a result of an accident.

Some companies include the risk of temporary partial disability.

The title provides insurance for the loss of property rights as a result of various encumbrances (unaccounted for heirs, incapacity of the former owner, seizure of property, etc.)

Title insurance applies only to second homes.

What must be insured?

Article 31 of the Federal Law "On Mortgage (Pledge of Real Estate)" obliges the borrower to insure the pledged property.

And it's all.

Obligatory for a mortgage is only insurance of the mortgaged apartment. The bank by law cannot require life and health insurance - the borrower and co-borrower, if any. Just like title insurance.

Contract time

The property must be insured for the entire term of the loan. Life and health, as a rule, are insured for the same period.

Title insurance is issued for three years - this is the limitation period for property rights.

Sum insured

The sum insured is equal to the loan amount increased by 10%.

If a loan is issued in the amount of 1,000,000 rubles, then the sum insured will be 1,100,000.

The borrower can take out insurance for the loan amount or for the full cost of the apartment.

The bank will claim to pay only the part that is equal to the mortgage debt. The rest will be received by the insured upon the occurrence of an insured event.

As the loan is repaid, the sum insured will decrease.

The disadvantage of incomplete insurance (when the sum insured is less than the actual cost of housing) is that this amount may not be enough to cover the damage.

If you want to know where and how you can get a government-supported mortgage, we advise you to read.

At the conclusion of the contract, a schedule for the payment of insurance premiums is drawn up, which is subject to agreement with the bank. Payment is made once a year, on the date indicated in the schedule.

Failure to pay the fee will result in the contract being terminated for the duration of the delay. The policyholder has the right to apply to the insurer with an application to postpone the payment of the next installment. An additional agreement is drawn up, of which the bank is notified.

The first installment can be paid in installments, but only with the written permission of the bank. Banks provide this opportunity in exceptional cases.

As the sum insured decreases, the annual insurance premium also decreases..

The tariff rate for property insurance on average starts from 0.1%, for life insurance from 0.15%, title insurance from 0.2%.

What affects the rate?

The title insurance rate depends on how many transactions with the apartment were made for its purchase and sale. If the apartment was owned by only one owner, the tariff may be equal to the base rate.

The insurance company independently sets the cost of life insurance for a mortgage.

Mortgage life insurance rates depend on age, occupation, hobbies, and health status.

In the medical questionnaire, the insured needs to answer a number of questions regarding his state of health and lifestyle (bad habits).

For men, the basic tariff rate is higher than for women.

The rate will change over the years - the older the insured person, the higher the rate.

The first question in the questionnaire is the height and weight of the person being accepted for insurance. If the ratio is violated (large weight with a small stature, or vice versa, too low weight), the tariff will be increased.

Moreover, the insurer has the right to demand a medical examination. Each company has a list of diseases with which it does not accept insurance.

False information provided in the questionnaire will result in a refusal to pay insurance coverage and termination of the insurance contract.

Insurance payout

In property insurance, payment can be made only upon agreement with the bank.

The actions of the insured do not differ from the standard ones prescribed in the rules. Before making a decision on the payment and its amount, the insurance company coordinates this issue with the bank.

By law, only the owner or a person with an insurable interest can be a beneficiary (Chapter 48, Article 930 of the Civil Code of the Russian Federation).

In our case, in terms of debt, the bank becomes the beneficiary of the loan, but only in case of total damage.

If the damage is partial, the owner of the apartment will receive the payment. These conditions must be written in the policy.

Recalculation in case of early partial repayment of the loan

Often taken with the participation of maternity capital. It helps pay off part of the loan.

Accordingly, the loan amount is reduced and on the date of the next payment, the schedule for paying insurance premiums must be revised.

A new loan repayment schedule is presented to the insurance company, on the basis of which a recalculation is made.

If there are several such early repayments during the entire period of mortgage loan insurance, you need to contact the insurer each time

Who needs insurance and why?

The bank is trying to protect itself from the risk of loan default.

A borrower who finds himself in credit bondage for a long time cannot foresee all possible adverse events.

In the event of his death, the obligation to repay the loan will fall on the heirs.

When concluding an insurance contract, the insurance company will return the loan.

In the secondary housing market, which has repeatedly been in transactions, there is a risk of losing it as a result of various encumbrances.

Insufficient verification of the purity of the transaction can overnight deprive of housing, for which you still have to pay and pay the bank.

For a small fee (compared to potential losses), you can protect yourself from all possible risks associated with the loss of property, life and health.

Choosing an insurance company

Now there is no such thing as accreditation of an insurance company with banks, but there is a list of requirements for them.

Usually, the bank "unobtrusively" offers a list of insurance companies with which it cooperates. The secret is simple - the bank, as an agent, receives a commission for each concluded insurance contract.

If the borrower has a valid life insurance contract, the bank, when issuing a mortgage, is not entitled to require the conclusion of another in “its” insurance company.

You can find a bank where such a policy will be accepted unquestioningly. At the same time, it is necessary to draw up an additional agreement with the insurer on the introduction of a new beneficiary - the bank - into the contract in terms of the loan debt.

Can I opt out of insurance?

The law is the law, and the bank observes its interests regularly. Therefore, insurance is “imposed” on the borrower on a voluntary-compulsory basis. It is possible to refuse optional types, but is it worth it?

If the borrower refuses life insurance, the bank has the right to refuse to issue a loan without giving reasons or to increase the interest rate on the loan. On average, in this case, you will have to overpay 2% per year for a loan.

Choosing an insurance company. Types of mortgage insurance. We invite you to watch the video.

Hello. 09/08/2015 we took a mortgage at the Savings Bank for the "Acquisition of finished housing." The term of insurance is ending, the contract states:
item 4. Interest rate or the procedure for determining it - 13.75%
In the event of termination/non-renewal of the life and health insurance contract/policy of the Title Co-borrower and/or replacement of the beneficiary under the life and health insurance contract/policy, the interest rate on the loan may be increased from the date following the second payment date after the day the lender receives information about the termination / non-renewal / replacement of the beneficiary to the level of the interest rate in force at the time of the conclusion of the contract for the product “Purchase of finished housing” on similar conditions (amount, term) without compulsory life and health insurance, but not higher than the interest rate for such a product, effective at the time of acceptance by the creditor decisions to increase the interest rate in connection with the failure of the title co-borrower to fulfill the obligations of life and health insurance. After the co-borrowers provide the lender with duly executed documents and fulfill the conditions provided for in clause 20 of the agreement, as well as the submission of a written application by the title co-borrower, from the date indicated by the lender in the notice of a positive decision on his application:
- the interest rate for the use of the lender is set at 13.75%

p9. Obligation of the borrower to conclude other agreements:
1. Account opening agreement
2. The contract of insurance of the real estate, issued as a pledge in accordance with 4.4.2. General terms and conditions of lending, on terms determined by the insurance company chosen by the co-borrowers from among those that meet the requirements of the Lender.
3. Life and health insurance contract of the title co-borrower on the terms determined by the insurance company chosen by the title co-borrower from among those meeting the requirements of the creditor. When calculating the full cost of the loan, tariffs were used. The title co-borrower has the right to use the services of another insurance company, while the amount of the total cost of the loan may differ from the calculated one.
Question:
1) If I do not renew the life and health insurance contract, does the bank have the right to raise the interest rate under the contract (during registration, the loan officer told us that they would raise it by 1%)?
2) Can I get a life and health insurance service in any other accredited company? (Sberbank has 17 companies accredited for personal insurance)? The first year of insurance was in Sberbank, now I don’t want to insure there
3) They called from Sberbank and said that life insurance is ending and the insurance policy needs to be renewed, and they said that under the terms of the contract one insurance must be done through them, is this true? If the contract states that the co-borrower has the right to use the services of another insurance company