Loan: Mandatory and optional coverage
When you take out consumer credit, there is the matter of insurance coverage in the event of problems arising. What types of insurance does this specifically involve? Which are mandatory and which are optional? Do the services differ from bank to bank or are they identical for all banks? When do the insurance policies take effect and for how long?
3 types of insurance are concerned:
- Death insurance
- Sickness and accident insurance
- Unemployment insurance
Mandatory and optional coverage
Mandatory death insurance
Death insurance is the only mandatory coverage. It is included in the interest rate.
Optional coverage strongly recommended
We strongly recommend taking out sickness / accident and unemployment coverage, all the more so if you have borrowed a large sum. If you assume the risk of not taking out additional coverage, check that with 30% less income, you will still be able to make your monthly repayments without this affecting your essential needs.
In the event of death, the loan is cancelled outright and the insurance company repays the whole amount lost to the bank. If you are married or living with your partner, do not fear, your partner will having nothing to repay!
The services provided by death insurance policies are governed by Swiss consumer credit law and are therefore identical for all banks.
Sickness and accident insurance
Differences between the banks: date of effect of cover
After how long does the sickness and accident insurance coverage take effect if you have a health issue that prevents you from working while you are repaying a loan?
First and foremost, the contract must have been in place for at least 3 months.
Then, the time at which the insurance cover is provided depends on the bank. As a general rule, the insurance policy provides cover from the 4th month after the health problem arises. To give you an example of an isolated exception, the insurance provided by the Banque cantonale de Genève (in french) will only pay your monthly repayments from the 7th month.
Coverage can extend for up to 2 years at most, which corresponds to the legal duration. At this point, invalidity insurance makes a decision regarding your situation.
In order to be entitled to unemployment insurance, your contract must also have been in effect for more than 3 months.
After this, insurance cover is only activated if your situation meets the conditions for obtaining unemployment benefits, for example having been laid off and having worked full-time for the past 12 months.
Finally, the maximum period of cover is 2 years.
Differences between banks: the amounts repaid
The unemployment insurance policies at all banks repay the full monthly repayment amount, with the exception of the BCG, which will only repay 50% of your monthly repayment amount.
P.S.: the time periods stipulated hereinabove are provided as a guide only.
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