One of the requirements for all the Banks to grant Housing Credit is the Life InsuranceThis insurance assures the liquidation of the total loan in case there is any accident to any one of the proponents which causes him/her to be incapable of exercising a gainful activity. These claims, caused by accident or illness, can lead to death or some kind of disability. In the first case, death, both insurances settle the loan, but in the second one, disability, there are differences depending on the type of insurance.

There are two types of insurance coverage that influence the premium.

ITP - Total and Permanent Disability

This option is more expensive, but it also offers the most extensive coverage. You can claim this insurance if the incapacity is, usually, over 60%.

After a loss that causes some type of disability, the applicant should request a report from the medical committee attesting to this disability. It is possible that in these cases, although unable to perform the professional activity they had performed until then, people still have a reasonable quality of life.

IAD - Absolute and Definitive Disability

In this case, which tends to be cheaper, the declared incapacity must be over 80%Here it is assumed that the claimant is no longer able to take care of his or her basic needs, such as eating, dressing, moving around, or personal hygiene. However, everything will depend on the sensibility of the doctor who certifies the incapacity, since it can occur in situations where the person even continues with a reasonable quality of life and has access to loan settlement.

Important Notes

  • Most banks present the IAD option in the first proposals and corresponding FINE (ESIS), as it is cheaper and more advantageous when the client only considers the price when comparing proposals.
  • The acceptance of these insurances always depends on the insurer, who tries through a clinical questionnaire and possible medical reports or complementary exams to understand if there is an abnormal probability of a claim. In people with a medical history, the acceptance of the insurance can be refused, accepted with a price increase, or accepted with exclusions related to the existing pathologies.
  • In the mid-term it is possible to switch from IAD to ITP and vice versa, but once again the case must be analyzed on a case-by-case basis by both the bank and the insurance company, which may or may not change the current financing terms.
  • Both insurances differ according to age and the amount in debt, so it is common for the amount paid monthly to vary over the course of the loan. The amounts increase as you get older, but decrease as the amount owed decreases.

 

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