French Life Insurance

Most French banks require life insurance to be taken with a French mortgage. We'll explain the logic behind that philosophy and the pros and cons of different levels of coverage.

The term "life insurance" in anglophone countries is known in French as "assurance décès" which literally translates to "death insurance." This is not to be confused with the French product "assurance vie" which literally translates to "life insurance."

"Assurance décès" is most often paired with a French mortgage and has the objective of paying off the remaining mortgage in the event of the death of a borrower. For simplicity, we are referring to "assurance décès" when using the term French life insurance.

"Assurance vie" is a savings plan invested in a portfolio of stocks, bonds or currency markets. French interest only mortgages are often paired with an Assurance vie contract where the funds deposited are intended to grow over time to be able to pay off part or all of the mortgage at the end of the interest only term. For French residents this is the most used tax sheltered investment vehicle. See the article "French pensions and tax optimisation" for more information.

Most French lenders will require that borrowers have life cover for at least 100% of the French mortgage amount. This is usually related to income. For example, a couple who earns roughly the same income could take French life cover for 50% of the French mortgage amount each. This means that in the event that one borrower dies, 50% of the remaining French mortgage would be repaid by the life cover. If one person earned 70% of the household revenue and the other 30%, the French life insurance may be split 70% based on the health of the first person and 30% on the other. If one is borrowing alone or has a stay at home spouse, the French life insurance would be for 100% of the French mortgage amount for that person.

It is also possible to have French life insurance for 100% of the French mortgage for each borrower however it is more expensive. Many banks believe it is more responsible to advise their clients to be fully covered to pay off the debt in the event of the death of a spouse regardless of what percent that spouse contributes to household earnings.

For larger loans over 200,000 euros, many French life insurance companies will request medical exams and or a health questionnaire to be completed by a doctor. The exams can be done free of charge in most large French cities or in your home country. Expenses for exams at home are reimbursable in most cases.

Request your free quote for French life insurance today :

France Home Finance is a fully licensed and insured insurance broker offering French life insurance, French home insurance and tax sheltered savings plans.


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