Any banking structure that provides mortgage lending to individuals strives to protect its funds from unforeseen situations and minimize the risk of loss. Therefore, they offer all their borrowers who receive financing for the purchase of residential real estate to take out insurance for the property and health purchased on credit. If the first type of insurance is mandatory when concluding an agreement with almost any bank, then it is quite possible to refuse life and health insurance for a mortgage.
However, should this be done? After all, a mortgage is usually issued for a long period, during which various health-related troubles may occur to the responsible borrower. In the absence of an insurance contract, even complete loss of ability to work will not relieve the client of responsibility; his obligations to the bank will remain in force despite the impossibility of paying contributions. And if an insurance policy is purchased, then financial responsibilities will fall on the shoulders of the insurer.
On the other hand, if the client is ready to enter into a life insurance contract, the bank will be more willing to issue a loan (even in some cases make concessions), since there will be confidence that financial interests will be covered by insurance. It turns out that life insurance for mortgage lending is a mutually beneficial procedure.
What does insurance protect against and what does insurance provide?
Mortgage life insurance will provide financial compensation in the following situations:
- Temporary loss of ability to work. This clause is specified separately in the insurance contract. In this case, payments are provided for the period of the client’s incapacity for work in the full amount of insurance premiums or in part.
- Obtaining disability of I, II groups. In this case, the amounts of regular contributions are revised based on the nature of the disability, degree of ability to work, and the actual amount of income of the borrower. The difference between the final payment amount and the initial amount specified in the mortgage agreement is paid by the insurer.
- Death of the borrower. The entire remaining amount of debt is paid by the insurer in full, the mortgage debt is fully repaid, and the property becomes the property of the legal heirs.
Despite the utmost clarity and transparency of the insurance contract, many clients who are faced with the task of taking out a loan to purchase real estate for the first time refuse to purchase a policy. This is usually caused not by a lack of information about what such insurance protects against and what it provides, but by the desire to save money. After all, in addition to regular mortgage payments, you will also have to pay annual insurance.
Therefore, in response to the most frequent remark of such thrifty borrowers: (why do I need life insurance?), the following arguments can be given:
- The insurer will assume the obligation to repay the loan (in part or in full).
- Neither the bank nor third parties will claim the property, and the relatives of the responsible person will not be subject to an unbearable debt burden.
- And most importantly, you can count on a decrease in the interest rate on your mortgage loan. In other words, the bank reduces the amount of payments by an amount almost equal to the borrower's costs for insurance. The only thing to consider is that mortgage payments are usually made quarterly or monthly, and insurance premiums in most cases are paid once a year, so you should prepare the required amount in advance.
Is it necessary to have life insurance when insuring a car?
Don’t think that you’re the only one who has had to deal with such an injustice as life insurance tied to the “automobile” insurance policy. Many car owners do not even realize that they are purchasing a car insurance policy with an additional service in the form of life insurance.
This situation is quite common, but there are cases when car owners do not accept applications for compulsory motor liability insurance due to the lack of forms, and they also come up with other illegal reasons. One can come up with many cases of refusal, but whether life insurance is mandatory under compulsory motor liability insurance in 2021 remains an open question. The most pressing issue is when purchasing the first policy.
In general, the cost of life insurance imposed on compulsory motor liability insurance is not very high. But the legislation on compulsory insurance of such actions on the part of the insurance company does not provide for and even punishes unscrupulous companies.
That is, the opinion that without purchasing a life insurance policy there is no compulsory motor liability insurance is a complete misconception. In 2021, driver liability insurance is allowed to stand alone from other types of coverage when you don't think you need it.
How is the insurance amount calculated?
The amount of insurance can be determined based on the full value of the property purchased with a mortgage, or the insurance contract can be concluded for the loan amount. In the second case, the policy covers 70-80 percent of the full price of the property, since mortgage schemes usually provide for a down payment of 20-30% of the appraised value. This is a general situation; the final price of insurance is also determined by many other factors:
- Borrower's gender. As practice shows, insurance cases happen to women less often, so the policy will cost them a little less.
- Profession. Some types of professional activities are accompanied by significant risks to life and health, so representatives of dangerous professions and people working in hazardous conditions will have to pay large amounts of insurance premiums.
- Extreme hobby. If the borrower is interested in hang gliding, parachuting, diving, or other activities associated with an increased risk of serious injury, this will also have an unfavorable effect on the amount of contributions.
- Age. The older a person is, the weaker his immunity is, and he is more susceptible to external adverse factors. This means that insurance will be more expensive for older people.
- Health status. In the process of concluding an insurance contract, the client is asked to provide reliable information about existing chronic diseases and indicate height and weight parameters. In case of severe illness or excessive deviation of height and weight indicators from the norm, indicating dystrophy or obesity, the policy will cost more. And if false data regarding health is revealed, the borrower may be denied insurance payments.
Most insurance companies offer health and life insurance in the amount of 0.5-1.5 percent of the total loan amount (or the estimated value of an apartment or other real estate purchased with a mortgage).
What to do when imposing life insurance when purchasing compulsory motor liability insurance?
Let's look at what can be done if life insurance is imposed when purchasing compulsory motor liability insurance :
1. Go to a reputable insurance company. As practice has shown, such companies exist, you just need to search a little.
2. “Knock out” the refusal to conclude a compulsory motor liability insurance policy. Insurance managers do not issue refusals voluntarily; this will cost them a lot. However, it is possible to force the insurance company to conclude an agreement with you. To do this, you need to write an application and send it to the insurance company by registered mail with a receipt stamp.
The text of the statement should be something like this:
I ask you to conclude an MTPL agreement for a car... and include the following drivers in it... I am attaching to the application a copy of my passport, a copy of my driver’s license, a copy of the diagnostic card, and a copy of the vehicle registration certificate. Please notify me of your decision by phone and in writing at
The insurer will not be able to ignore a written request. He will either immediately invite you to conclude an agreement or give you a written refusal. A written refusal can be submitted to higher authorities. This will be a very good basis for imposing a fine.
This option makes sense to use only if the insurance company is dear to you for some reason and you do not want to go to another one. Well, or if in your locality all insurers are engaged in imposing life insurance when purchasing compulsory motor liability insurance.
3. Buy life insurance. This option is the simplest, which is why most drivers choose it.
However, I recommend that you first fight at least a little for your rights, go to different insurance companies, and try to get a written refusal. This will be good experience in asserting your own rights, which may be useful to you in the future.
4. Apply for compulsory motor liability insurance via the Internet. The opportunity to buy an insurance policy online appeared in mid-2015. In 2021, all insurers are required to sell electronic insurance policies.
Additional services cannot be imposed on the driver via the Internet, so the cost of insurance strictly corresponds to the value calculated using the OSAGO calculator.
Note. Some cunning insurance companies who do not want to sell compulsory motor liability insurance via the Internet imitate technical errors or deliberately delay the document processing process.
However, in 2021, purchasing an electronic MTPL policy is the best option.
How to get an insurance policy
Borrower insurance is carried out in two ways. A bilateral agreement can be concluded at any time: before taking out a mortgage loan and after. In the second case, the client can submit an application to the bank to revise the interest rate, thereby reducing the amount of regular payments in accordance with the amount of insurance premiums. However, this will oblige the borrower to renew the policy annually until the mortgage agreement is terminated and the property becomes his full property.
The tripartite agreement is concluded simultaneously with the loan registration. In this case, the stakeholders are the bank, the client and the insurance company. In this case, the borrower also gets the opportunity to pay premiums at a preferential rate and is obliged to extend the validity of the insurance contract for the entire loan period.
When taking out a life and health insurance policy, most insurers offer clients to choose the most convenient form of payment. A standard insurance contract usually provides for annual payments equal to the interest rate on the balance of the loan amount. However, the borrower can choose other options by paying equal installments quarterly or monthly.
On the Prosto Insure portal you can choose the most profitable life insurance for a mortgage among popular insurance companies. To do this, enter the necessary data for the calculation on the calculator page.
Where to send a complaint if the company refuses to sell compulsory motor third party liability insurance without life insurance?
If the insurance company you have chosen refuses to conclude an agreement on compulsory motor liability insurance without life insurance or other additional services, you have a choice: contact another organization or file a complaint against this insurance company and get it to sell the policy without related products. It all depends on your desire and perseverance.
If you decide to take the second path, you will have to take a number of steps to file a complaint in court. This is a long and laborious process that can take a lot of time and effort, but in the end you will achieve your goal.
First of all, you need to obtain an official refusal from the insurance agent. It is necessary to either record the conversation on a voice recorder or demand that the reason for the refusal be provided in writing. Testimony from witnesses will also be required, so it will be better if you come to buy an MTPL policy with one of your friends or relatives.
After this, you file a claim with the court and wait for its consideration, which may take two to three months. The biggest disadvantage in this situation is the ban on using a car, since you do not have a compulsory motor vehicle policy, however, you can benefit from this situation. Together with the statement of claim, draw up a demand for recovery of moral damages that you suffered due to the inability to use the car. You can also recover material damages from the insurance company if the vehicle served as a source of income.
As a result of the process, the insurance company will be obliged not only to sell you an MTPL policy, but also to compensate for monetary losses.
In addition, lawyers recommend simultaneously filing a complaint with Rospotrebnadzor to protect the rights of the buyer.
Documents required for mortgage life insurance
To obtain a policy, the client must submit the following documents:
- application in the form established by the insurance company;
- completed application form;
- a photocopy of the work book (all completed pages);
- state-issued civil passport;
- a loan agreement or a document certifying the estimated value of the property (apartment, part of it, house);
- at the request of the insurance company - a certificate from an official medical institution about the state of health.
What goals does it pursue and accomplishes?
Life insurance helps solve a number of social and financial problems of policyholders and insured persons. The social purpose of life insurance is to strengthen assistance to pensioners, people who have lost their jobs or are unable to work.
It helps to eliminate the existing disadvantages in the compulsory state insurance system and the inadequacy of the proposed security through the introduction of a funded system.
The financial goals of such insurance are based on protecting the property interests of the insured.
Social goals are:
- protection of the family in the event of the loss of a breadwinner or his death;
- provision in case of temporary or permanent disability;
- providing pensions in old age;
- accumulation of financial resources to support children (for example, to purchase real estate, obtain education);
- payment for funeral services.
Financial goals:
- accumulative, associated with receiving interest from investment activities and investing capital;
- protection of private capital and interests of partners in the event of the death of the insured person;
- protection of inheritance by paying inheritance tax from the premium, facilitating its transfer to the recipient or exemption from taxation;
- increase in personal income through the use of preferential taxation and life insurance payments.
The objectives of life insurance are:
- ensuring the material well-being of the insured person;
- protecting families from the risk of losing their livelihood;
- improvement of the existing compulsory insurance system;
- resolving monetary issues related to inheritance taxation;
- preservation of the insured person's capital;
- reduction of income tax on property of individuals;
- ensuring the implementation of basic human labor rights;
- redistribution of resources;
- investment.
The responsibility for life and health insurance is not imposed by the state on the citizen (Article 935 of the Civil Code of the Russian Federation). But a number of reasons may force him to do this.
You can find out the cost of health insurance in the article: health insurance. Read what endowment life insurance is here.
Procedure for insurance payments
When concluding a tripartite agreement, all financial issues in the event of an insured event are resolved practically without the participation of the client, between the insurer and the bank. The borrower is only required to promptly notify the parties to the agreement and, if necessary, provide documentary evidence.
If the policy was obtained without the participation of the bank, then the client or his heirs independently draw up insurance payments, which are transferred to the bank to pay off the debt on the mortgage loan.
Where to complain about an insurance company
If, when insuring compulsory motor liability insurance, life insurance is imposed, and after providing a refusal of an additional service, the insurance company does not make concessions, the car owner turns to the authorized law enforcement and judicial authorities. Complaints are handled by:
- Rospotrebnadzor;
- Prosecutor's Office;
- Russian Union of Auto Insurers (RUA);
- Central Bank;
- Consumer Rights Protection Service.
In addition to the complaint, you will need evidence in the form of audio or video files, testimony.
If the issue is resolved positively, the company is subject to an administrative fine in the amount of 50 thousand rubles.
And if the appeal to the Central Bank is successfully resolved, the culprit will lose his license. But this will happen if there is a mass appeal of complaints of a single nature.
The owner of a vehicle must be sure that he is right, since no one has the right to impose life insurance in addition to compulsory motor liability insurance. The court and other authorized body in most cases side with the driver.
Recalculation in case of partial or full early repayment
The insurance contract is usually concluded for the entire term of the mortgage loan and provides for fixed amounts of payments, the amount of which can be reduced annually. If the borrower repays part of the loan ahead of schedule, he should contact the insurer about concluding an additional agreement. After the client provides documents from the bank certifying the remaining amount of debt, the amount of insurance payments for the remaining period will be recalculated. And if the long-term loan is fully repaid, the borrower can contact the insurance company with an application for the return of part of the amount of insurance premiums.
Another bonus that a client who insures his life and health receives is the opportunity to apply for a tax deduction (13 percent of personal income tax paid on wages).
Which insurance companies issue compulsory motor liability insurance policies without life insurance?
If the insurance company department tells you that it is not enough to insure the driver’s liability, but you also need to pay the transport tax and purchase another additional service, then quickly leave the office.
The driver is only required to have civil liability insurance. Other services are not included in the list. SKs who insist on their own way are scammers. In order not to initially fall for the bait of greedy insurers, it is advisable to independently calculate the cost of insurance. Knowing the real price of the policy, you will understand whether you are being deceived.
Large organizations that value their reputation will not force additional services on you. Because they have a fairly large financial turnover and they already make good profits from other projects.
It will not be a secret, these companies are:
- AlfaStrakhovanie;
- Tinkoff;
- SOGAZ;
- Agreement;
- MAX;
- RESO.
Compulsory life insurance
The insurers are the Social Insurance Fund, the Federal PS and the Compulsory Medical Insurance Fund. Insured under the contract can be legal entities and individuals, as well as individual entrepreneurs who use hired labor. Employers are required to pay monthly contributions to extra-budgetary funds.
An employee can additionally protect himself and conclude an insurance contract. Under the contract, the insured may be one subject or a list subject to collective insurance.
Mandatory types of such insurance are:
- insurance against accidents and industrial death;
- occupational health insurance;
- pension insurance;
- insurance in case of complete or partial disability.
The types of life insurance listed above are guaranteed by the state.
Rating of insurance companies
Knowing the rating is necessary for those individuals who have not yet decided on the choice of insurer.
The table shows the TOP-3 rankings in different categories:
| for insurance premiums: | on payments: | from the National Rating Agency: |
| 1. Sberbank insurance | 1. ROSGOSSTRAKH Life | 1. ROSGOSSTRAKH Life |
| 2. Renaissance Life | 2. MetLife | 2. NSG Life Insurance |
| 3. ROSGOSSTRAKH Life | 3. Allianz Life | 3. PPF Life Insurance |
Ratings are also compiled regarding the number of existing and newly concluded contracts.
