Recently, future borrowers are increasingly faced with the need to purchase an insurance policy, and sometimes several at once. Thus, the Bank seeks to insure itself against non-repaid borrowed funds and increase its income. Borrowers, in turn, do not want to overpay for the imposed service and do not want to be deceived. Therefore, before applying for a loan, you need to figure out whether it is possible to refuse credit insurance. The nuances in considering different options may vary. Let's look at when it is not worth filling out an insurance policy, and when it is better to insure yourself and your finances.
What is credit insurance?
The insurance policy is a guarantee of the return of funds taken from the bank when the borrower has an insured event.
The first reason why it is beneficial for the bank to cooperate with insurance organizations is the sale of insurance policies and the receipt of agency payments from insurance companies when selling their products to borrowers.
The second reason is that the insurance company places insurance reserves in bank deposits. Funding of financial institutions is carried out in exchange for their involvement in the insurance organization of a certain number of insured persons. The exchange is made in the ratio of 7: 1, where for every 7 rubles from the sold insurance the bank receives 1 ruble from the insurance company in the form of deposits.
Why do you need insurance?
It is no secret to anyone that banks are not entitled to carry out compulsory insurance of customers. But this is in theory. In practice, in order not to fall into trouble, it is necessary to read the loan agreement very carefully so as not to wonder how to refuse credit insurance and not write statements of claim. The court in each case finds out whether the borrower depends on the acquisition of the insurance policy and whether the absence or, on the contrary, the existence of the insurance contract is the main factor influencing the adoption of a positive decision by the bank. Indeed, according to one of the articles of the law “On the Protection of Consumer Rights”, it is forbidden to make the acquisition of certain services dependent on the obligatory acquisition of others.
But of course, the need for compulsory insurance as a condition for obtaining a loan is absent in the loan agreement. This phrase is camouflaged as “collateral for the fulfillment of obligations by the borrower to the bank”. So the bank, it turns out, is clean before the law.
Is it possible to refuse insurance?
In fact, when arranging a loan, credit managers carry out the imposition of insurance. But how to refuse credit insurance? The instruction consists of only two steps.
Step 1. Refusal of insurance is made immediately after the conclusion of the loan agreement. But you need to make sure that the termination of the insurance contract does not entail an increase in annual loan interest or other “punitive” measures by the bank.
Step 2. After this, a statement is written to the insurance organization, and after a certain time the insurance premium will be returned in whole or in part (this can be provided for in the insurance contract upon termination).
Some loan managers tell their customers how to opt out. loan insurance. To do this, it is enough within 6 months from the date of conclusion of the loan agreement to make monthly payments on time and in full. After the expiration of a six-month period, you should apply with a written application for termination of the insurance contract to the credit department of the bank. Why is it necessary to wait 6 months? An insurance contract is concluded for at least six months. You should not be surprised at the borrower when, after the termination of the insurance contract, an increased percentage will be accrued on the balance of the main debt, and monthly payments will increase. Thus, the bank compensates for the lost funds.
Another option is to opt out of credit insurance, consists in filing an application with the court. Loan documents must be attached to the statement of claim, and, if possible, a written refusal of the bank.
Arbitrage practice
Based on judicial statistics, in 80% of cases, the court takes the side of the borrower, forcing the lender to forcibly terminate the contract, pay insurance and recalculate the main debt.
Credit insurance: how can I refuse consumer insurance?
As a rule, consumer lending is characterized by a short term, lack of collateral and a high interest rate. It already by default includes all the risks that a bank may incur.
But some financial institutions are persistent in trying to insure the life and health of their borrowers. Widely used job loss insurance. And if the first type of insurance justifies itself a little, then the second borrower incurs direct losses. And all because the loss of work is not considered as an insurance event of one’s own free will, but in connection with the liquidation of the enterprise or reduction of the employee. But, as practice in Russia shows, upon the occurrence of one of such moments, the employer will lead his employee to write a statement of his own free will, so as not to pay him the compensation due. Also, when applying for a loan, the bank in the amount of the principal debt by default includes the insurance fee, and from this amount the annual percentage is already calculated.
It is worth paying attention that the very concept of the insured event is very complicatedly formulated in the contract. Very often, upon the occurrence of the insured moment, it is practically impossible for the insured to receive compensation. And an example of this is the clause of the insurance contract, which states that "at the slightest change in your health, the insured person must inform the insurer about this." But in reality, the majority simply waved the contract without going into details and, accordingly, not observing this condition. What the insurer uses in order not to pay. In this case, considering the question of how to refuse credit insurance, the answer will be a careful study of the loan agreement.
Car loan
When applying for a car loan, the borrower is required to purchase two insurance policies: life + health and CASCO. But at the same time, one of the clauses of the insurance contract says that it is not necessary to insure the subject of the pledge. Example: VTB Bank offers its borrowers a car loan without a CASCO insurance policy. But at the same time, the annual percentage for which a loan is granted increases by 5-7.5 points. Therefore, in this case it will be more correct to draw up this policy.
Is it necessary to insure life?
But it is better for each borrower to decide for himself: to refuse credit insurance VTB and get a higher annual percentage or search for a bank with the best deals. But life and health insurance is worth considering: a car loan lasts from 2 to 5 years, and if the borrower receives a loan for a car in his youth and is not interested in fast driving, then the probability of an insured event is small.
Insurance at a bank for a loan - how to refuse a mortgage?
Here you can’t get away from insurance. The law obliges to conclude an insurance contract “From loss and damage of the subject of pledge” (Article 31 of the Law “On Mortgage”). Two other insurance programs that the borrower can use at their option are termination and restriction of ownership (title insurance), as well as loss of life and disability. But if he refuses, then the bank has the right to revise the interest rate up. In general, banks are extremely rare in which the increase in the interest rate does not depend on the design of the insurance policy.
And if in case of refusal from title insurance the annual rate increases by 1.5 points, then refusal to issue two policies (title and life insurance) will lead to an increase in interest by 10 points at once.
The calculation of interest on insurance is as follows
- Mortgaged property is estimated at 0.5% of the sum insured.
- Title insurance ranges from 0.1 to 0.4%.
But life insurance already draws 1.5% of the amount of insurance. But, taking into account the conditions under which a mortgage is issued in Russia, the need for title insurance and life + health is inevitable for those who want to take a mortgage.
There are mortgage programs that involve insurance only on the subject of collateral. These programs are used by Sberbank-credit. Can I refuse insurance for other insurance programs? Yes, but if you refuse from title insurance, the annual percentage will rise by 1 point.
The benefit for the bank, as mentioned above, lies in the agency fee that the financial institution receives from the insurance company when applying for policies. Therefore, it is extremely unprofitable for a credit institution to inform the borrower of the information how to refuse bank insurance on a loan.
Also, very often there are cases when the bank and the insurance company are affiliated. It is for this reason that the bank insists on the borrower buying insurance policies from certain insurance companies.
We hope that now each of the readers knows how to refuse credit insurance. The main thing is to carefully read the contract!