In summary…
Since the Lemoine Law, borrower's insurance can be changed at any time, free of charge and, under two conditions, without a health questionnaire. On a €250,000 loan over 20 years, switching from the bank's contract to an external one reduces the cost from €17,000 to €6,000. The typical savings are between €5,000 and €15,000.
1. What the Lemoine Law Changes
Law No. 2022-270 of February 28, 2022, removed the requirement for expiry dates. Since June 1, 2022, for new loans, and since September 1, 2022, for existing loans, borrowers can cancel their insurance at any time, without fees or penalties.
The bank can only refuse the new contract if its guarantees are not equivalent to those it requires. It cannot change the loan's interest rate in exchange for the substitution. The change does not require waiting for an anniversary date: the request is submitted with the new contract, and the bank can only refuse it if the guarantees are not equivalent.
2. Without a health questionnaire: the two conditions
The medical questionnaire is waived if two conditions are met. The insured amount does not exceed €200,000 per insured person, including all outstanding mortgage loans. The loan is paid off before the insured person's 60th birthday.
The threshold is assessed per person: a couple borrowing €250,000, each insured at 50% (%), declares €125,000 per person. The law also reduced the right to be forgotten to 5 years.
The coverage percentage is just as important as the amount. On the same loan of €250,000, a 100% % coverage on each person would bring the insured share to €250,000 per spouse, above the threshold: the questionnaire would once again become mandatory.
3. Concrete example
Situation. A couple aged 35 and 37 borrows €250,000 over 20 years for their main residence. Bank insurance, 50 % on each person.
Issue. Total cost of the group contract over the term of the loan: €17,000, for guarantees that the market offers cheaper.
Strategy. Substitution by an external contract under the Lemoine law, with equivalent guarantees. Each spouse insures €125,000 and the loan ends before they turn 60: no health questionnaire.
Result. Total cost reduced to €6,000. Savings of €11,000, nearly two-thirds of the initial premium. Typical example: the usual savings are between €5,000 and €15,000.
4. The pitfalls of change
The equivalence of guarantees is assessed criterion by criterion, based on the standardized information sheet provided by the bank. A cheaper but less comprehensive contract will be rightly rejected.
The €200,000 threshold includes all outstanding mortgage loans held by the insured. A rental investment financed by a loan may be enough to exceed this threshold and require resubmitting the questionnaire.
Time is working against the borrower. Every year spent on the bank contract is a year of lost savings: the trade-off is made early in the life of the loan.
5. What you need to gather to compare
The loan offer, the group contract guidelines, and the standardized information sheet are all relevant. The comparison focuses on the total remaining cost until the end of the loan term, with equivalent guarantees, not just the monthly payment. It is this total cost that generates the savings. The longer the remaining term, the greater the difference in euros: the best time to compare is as early as possible.
Frequently asked questions
Can I change my loan insurance at any time?
Yes. Since September 1, 2022, the Lemoine law allows it for all loans, including those signed before, without fees.
Do I need to fill out a health questionnaire?
No, if the insured amount does not exceed €200,000 per person, including all outstanding mortgage loans, and if the loan ends before you turn 60.
Can the bank refuse the new contract?
Only if the guarantees are not equivalent to those it requires. It cannot change the loan rate in return.
Is your loan insurance from your bank? Book a wealth management consultation: we'll calculate the savings for equivalent coverage.
