January 15, 2020

Home loan insurance for smokers

To carry out a home acquisition project, the use of a mortgage is common. In this case, the future owner is obliged to take out borrower insurance in order to cover himself in the event of an inability to repay. If such an approach proves beneficial in many respects, it should be emphasized that the conditions linked to the insurance contract may vary depending on the insured. This is the case, for example, for smokers whose files are treated with particular attention.

Smokers are categorized based on the number of cigarettes they smoke per day. Thus, a smoker who smokes a lot will pay more than an occasional smoker. Even if the beneficiary of the home loan insurance starts smoking after the establishment of the insurance contract, he must declare it to his insurer.

In addition, since January 1, 2018, thanks to the Bourquin amendment in France, smokers and non-smokers alike have the possibility of changing insurance on each anniversary date of the contract. Here is a new deal that could lead borrowers who smoke to regularly seek the offers that are most favorable to them.


Smoking and home loan insurance, what impact?

home loan insurance, what impact?

It is entirely possible for a smoker to take out mortgage loan insurance with their banking establishment, or with an online broker specializing in borrower insurance such as Magnolia. However, the conditions of access to this type of contract are not the same for everyone. Indeed, while a non-smoker pays a fairly reasonable premium, the smoker inherits a higher rate for the same home loan insurance.

Under equal conditions, the margin can be particularly pronounced because of the risk profile that this type of borrower represents.

The first consequence of this finding is the premium that insurance companies charge. Because of the investment that home loan insurance represents, it is not superfluous to seek to negotiate the best conditions. But this option is particularly limited for smokers.

The premium is considered the most appropriate way by insurers to offset the risks they cover with borrower insurance. Even if classic profiles like those of non-smokers are also exposed, the cases of smokers are judged more harshly. In view of this situation, there are now several solutions to adopt to benefit from more flexibility.


How to reduce your mortgage credit insurance contributions when you are a smoker?

mortgage credit insurance contributions when you are a smoker?

For a borrower who smokes, the main difficulty when taking out home loan insurance lies in their ability to reduce the amount of their contributions. In this case, some may be tempted to keep silent about the fact that they are smokers on the declaration of health.

However, this option is strongly discouraged in the context of borrower insurance since it would cause a total and permanent loss of his insured status. Not only would we be denied any coverage, but the premiums paid would be lost. When you know that insurers are investigating in the event of a disaster, it’s best to stick to the strict truth.

To situate oneself in relation to one’s condition, one must refer to the consideration that insurers have of non-smokers. In essence, to be considered a non-smoker, you must have spent 24 months without having smoked. This also applies to those who vape and wish to take out mortgage loan insurance.

In light of these elements, quitting smoking can lead to lower borrower insurance premiums; Obviously, it remains to prove that cigarettes were effectively stopped over a period of 24 months.


Insurance delegation, an interesting alternative

home loans

Using competition in the insurance market is a practical way to avoid premiums. Thanks to the insurance delegation, the borrower has the possibility of choosing between several offers in order to determine the one that will be most favorable to him.

This solution is all the most interesting since the contracts offered by the lending organizations are not always adapted to the needs of the customers. They can defer to the right of termination to select a better offer. This move is motivated by the fact that borrower insurance costs twice as much for a smoker.

It should be noted that with a view to reducing premiums, making a commitment to quit smoking is an approach to consider. In this way, the borrower can claim a renegotiation at lower prices even during the contract. As the premium for smokers is generally between 20 and 50%, or even more in some cases, it is legitimate to seek better conditions.

For insurers, cigarette consumption is an aggravated risk factor. So, they put the necessary safeguards so as not to take big risks as is the case with people with a pathology considered serious.

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