In a previous article, we presented the various compulsory insurance policies when taking out a mortgage loan. Today we are looking at the benefits of outstanding balance insurance. As part of a mortgage or other type of loan, it helps protect your family in the event of death and is tax deductible.
In the context of a mortgage loan
In most cases, balance outstanding insurance goes hand in hand with a mortgage loan for the purchase of real estate. It constitutes a guarantee for relatives, but also for the bank that the outstanding amount of the credit will be reimbursed in the event of the death of the borrower.
This residual amount will then be fully or partially paid by the insurance. Note however that this is not subject to any legal obligation. No organization can force you to subscribe to it to take out a mortgage loan.
Life insurance balance outstanding for an installment loan
Balance outstanding insurance can also be considered in other cases. Thus, when concluding a personal loan, car, motorcycle or motorhome financing or the like or even a work loan, it is possible to take out specific balance outstanding life insurance.
This will therefore cover the amount of the loan. In addition to preserving the family in the event of death, it can also include additional guarantees such as incapacity for work or total permanent disability.
Your protected family
The main interest of the balance outstanding insurance is the protection of those around you in the event of death. Unfortunately, we can never anticipate this type of event. When this happens, the family of the victim must already bear the sad news.
Relatives are sometimes very young, or the partner may be in a precarious situation. To avoid weighing down the context and best protecting those around you in the event of your disappearance, the balance due insurance is an optimal solution.
If you meet the following conditions, it is possible to deduct your outstanding balance insurance:
- You are under 65
- You are the borrower and you have purchased insurance on your own
- The beneficiary is the person who has full ownership or usufruct of the property
This deduction is particularly interesting if you have not yet reimbursed a significant part of your credit.