How to avoid insurance when applying for a loan

3 secrets on how to refuse credit insurance

From June 1, 2016, new voluntary insurance rules have been in effect in Russia, which also apply to loan insurance. The question of whether it is possible to refuse insurance on a loan after receiving it has worried borrowers before, but after the innovation the situation became even more confusing. In this article, we will together understand the current situation, and you will also receive detailed instructions on how to refuse credit insurance. If you do not want to understand the intricacies of the insurance return law, we recommend that you use a simple test

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The legislative framework

The activities of banks and insurance companies are regulated by laws.

The relationship between clients and the bank is regulated by an agreement, and it is regulated by law. According to the instruction of the Central Bank of Russia dated November 20, 2015 N 3854-U, insurers are required to provide for the possibility of refusing voluntary insurance within 14 days after the conclusion of the contract. This instruction also applies to loan insurance. According to this instruction, which fully came into force on June 1, 2016, clients have the opportunity to terminate the insurance contract.
This is possible if no more than 14 days have passed since the conclusion, and also if no insured event occurred within these 5 days. Please note that the period of 14 days is not considered calendar days

This period is in no way tied to the payment of insurance; it is counted precisely from the date of conclusion of the contract. Therefore, if you entered into an agreement, but paid only after 13 working days, then you only have 1 working day left to terminate. The decree of the Bank of Russia was registered with the Ministry of Justice under number N 41072 dated February 12, 2016.

Insurance companies were given a grace period during which insurers could prepare for the innovation.

On June 1, 2016, the innovations fully came into force. According to this decree, the insurance company is obliged to terminate the contract and refund the money within 10 days. The refund amount is 100% of the amount paid, but minus those days when the client was insured. For example, if you cancel insurance after 3 business days, you will be refunded the full amount paid for insurance, minus the cost of three days of insurance. Insurance is regulated by 935 articles of the Civil Code of the Russian Federation. It clearly states that life or health insurance is a voluntary matter. The law “On Protection of Consumer Rights” is also on the borrower’s side.

According to the letter of the law, no one has the right to connect the receipt of one service (loan) with the purchase of another service (insurance). If you were forced to have insurance and were misled that it is mandatory, then you need to go to court and get your insurance back
Read also: Return of illegally imposed insurance and interest on it
There is only one exception - insurance for mortgage lending. Therefore, it is important to understand which loan insurance can be canceled and which are mandatory.

Mandatory and optional loan insurance

The law states that life insurance is a voluntary choice of the borrower. It follows that insurance is optional. Unfortunately, the practice of obtaining a loan differs from what one would expect based on the law. In practice, it turns out that banks force their clients to voluntarily and compulsorily take out loan insurance. The innovation of 06/01/2016 protects clients, as it allows you to refuse imposed insurance if you manage to do this within the prescribed period. Such imposed insurance most often concerns the following groups of loans:

Clients are offered life and health insurance, insurance against job loss, property damage, and in the case of car loans, CASCO insurance. All this is done with one goal - to reduce risks for the bank. Insurance allows you to eliminate the risk that you will not be able to repay the loan if one of the insured events occurs. In Russia, insurance is viewed with hostility, but this instrument can also protect the borrower.

Of the entire list of insurances, insurance against loss for purchased property is mandatory. For example, when buying an apartment with a mortgage. In this case, the bank has the right to require you to purchase insurance; this point is regulated by Law 935 of the Civil Code of the Russian Federation and 31 articles of the Law “On Mortgage”. Life, job or title insurance are optional insurances, even if the bank insists otherwise.

Insurance conditions in the agreement with the bank

The terms of loan insurance are specified in your contract. So it's not difficult to recognize them. It is possible that you will not be required to pay separately for insurance, since the bank itself will transfer the payment to the insurance company. The ideal option is if you refuse insurance before you sign a contract. To do this, you need to find out all the terms of the loan before your signatures appear on the documents.

You need not only to ask the bank employee, but also to carefully study the agreement yourself.

For example, below is an agreement on a consumer loan at Renaissance Credit Bank, according to which the client receives insurance. In such cases, you can try to cancel insurance before the conclusion. Only in rare cases will this not affect your credit. The bank may refuse to issue it without explaining the reasons. But the real reason will be that you refused insurance. Another option is that the bank will agree, but will offer you a higher rate. In this regard, the question arises: is it possible to use the innovation in the laws to enter into an agreement with a bank on favorable terms, and then cancel the imposed insurance?

Is it possible to refuse insurance?

Thanks to innovations, yes, you can refuse imposed insurance. The cooling period is the name given to the first 5 working days after signing the contract. Within this period, you can cancel the insurance contract. Including if this insurance is related to a loan. Banks come up with schemes that try to circumvent the law. For example, a bank may create one common group insurance for all borrowers.

In this case, the borrower is not sold insurance; he is simply connected to the collective insurance system. It turns out that in order to terminate the insurance contract, the client needs to “disconnect from the system” of collective insurance, and not directly terminate the contract. The law does not apply to this type of insurance, and therefore the client cannot terminate such insurance. It is expected that other schemes may appear in the future, as banks do not want to put up with these innovations.

How to cancel insurance?

Let's look at a practical example. You have applied to VTB Bank for a loan to buy a car. The rate is 7.9% per annum, but it is only valid if you sign a life insurance contract. If you refuse to take out insurance, you may be denied a loan or offered a much higher annual rate. After studying all the terms of the agreement, you understand that you need a loan. The terms of the loan are as follows:

Is insurance required when getting a loan?

When concluding a loan agreement, bank employees offer (and even impose) loan insurance on their clients, arguing that this is a prerequisite for receiving funds. Let's try to figure out whether this is really so, what will happen if you refuse credit insurance and how to avoid it in order to ultimately get money.

What is credit insurance

The main task of credit insurance is to protect the bank from the possible risk of losing funds when issuing loans to the public. This method allows you to reduce the interest rate at which the loan is issued, since if the borrower is unable to repay the debt on his own, the insurance company will do it for him.

Extract from the law

Insurance activities in the banking sector are regulated by the following regulatory legal acts:

• Federal Law “On Consumer Credit (Loan)” (Federal Law No. 353 of December 21, 2013);
• Civil Code of the Russian Federation (Article 935);
• Law of the Russian Federation “On the Protection of Consumer Rights” (Article 16);
• Federal Law “On Mortgage (Pledge of Real Estate)”, Article 31 (Federal Law No. 102 of July 16, 1998).

Cases when insurance is mandatory and when it is not

Article 935 of the Civil Code of the Russian Federation states that life and health insurance is a voluntary right of every person, and the law “On the Protection of Consumer Rights” states that it is prohibited to tie the receipt of some goods (this can include a loan) with the mandatory purchase of others (insurance policy ). However, bank employees insist that issuing an insurance policy is a prerequisite for obtaining a loan.

Let's consider the main types of insurance that a client encounters when contacting a bank.

1. Life and health insurance. This is the most common type of insurance offered by banks, in which in the event of the borrower's death (or disability), the insurance company will reimburse the funds issued by the bank. The cost of the policy on average is from 10 to 15% of the total loan amount. When choosing this type of insurance, you must carefully choose an insurance company, because the conditions under which payment occurs may differ.
2. Job loss insurance. In case of job loss, the insurance company will pay off the debt to the bank on a monthly basis within a certain period (depending on the chosen program, on average 6 months). This type of insurance looks very tempting, but few people know that by job loss, insurance companies mean dismissal due to the liquidation of an organization or reduction of staff. If the borrower quit of his own free will or due to violation of labor discipline (which is the most common way to lose a job), then he will not receive the payment. The cost of the policy on average ranges from 1 to 5% of the total loan amount.
3. Responsibility of the borrower for non-repayment of the loan. If the borrower does not pay the debt to the bank, then the insurance company will do it instead (the most rare type of insurance, since it is not beneficial to either party due to its high cost).
4. Title insurance. If the client unknowingly purchased property, the ownership of which belongs to another person (illegal housing transactions), the insurance company will pay the bank the cost of this property. This type of insurance is most often used in mortgage lending. The cost of the policy on average ranges from 0.5 to 1% of the total loan amount.

It can be noted that these types of insurance have an impact on the life and solvency of the borrower, and only he can decide whether he wants to protect himself from the above insured events (death, loss of job, non-repayment of debt).

However, there is another type of insurance that is directly related to the activities of the bank:

• Insurance of property secured by a loan. This type of insurance is mainly used for mortgage lending and is mandatory (this requirement is enshrined in Article 31 of the federal law “On Mortgage”). Until the funds are paid out, the property belongs to the bank, which must have a guarantee that nothing will happen to its property. The cost of this type of insurance averages from 0.5 to 1% of the cost of residential premises.

Thus, most insurance cases are voluntary, the only exception is property insurance, because it belongs to the bank until the loan is repaid.

It should be remembered that insurance is the bank’s guarantee that if problems arise with the borrower, he will be able to get his money back. It is insurance that allows the bank to reduce the interest rate at which it issues funds. If there is no such guarantee, the bank has every right to increase the interest rate or, under any other plausible pretext, refuse to issue a loan.

List of banks where insurance is optional

Almost any large bank can have several different loan programs, including without the need to obtain insurance. Alfa Bank, Tinkoff Bank, Raiffeisen Bank, SKB Bank, UniCredit Bank, Sberbank, Touch Bank, Otkritie Bank, Post Bank, Sovcombank have such programs. However, you should be prepared for the fact that the interest rate on such a loan may be higher and the loan amount may be less.

Information about all loan programs can be obtained on official websites, as well as at bank offices.

Insurance conditions specified in the loan agreement

The first step when concluding a loan agreement is to determine whether the issuance of an insurance policy is mandatory. If this is not a mortgage loan associated with collateral, then concluding an insurance contract is a voluntary right of every person. In this case, you must inform the bank employee about the refusal of insurance before signing the contract, and together with him, select a lending program that suits both parties.

If the borrower decides to use an insurance agreement, it is necessary to find out what form of insurance the bank offers. There are collective and individual insurance.

• With collective insurance, the bank independently enters into an agreement with one or another company and invites all clients who apply for a loan to join this agreement. This form of insurance is the most unprofitable for the borrower, since it does not allow terminating the contract or receiving a refund if the loan is repaid early. This is due to the fact that the insured person is the bank, and only it has the right to change the terms of insurance.
• With individual insurance, the borrower himself chooses the insurance company with which he enters into a contract, can terminate it, and also receive an insurance payment if the debt is repaid early.

The next thing you need to pay attention to is whether there is a clause in the loan agreement that in case of failure to fulfill insurance obligations (termination of insurance earlier than after 30 days), the bank has the right to raise the interest rate and even terminate it.

Is it possible to refuse insurance?

According to the federal law “On Consumer Credit (Loan)”, the client may refuse to take out an insurance policy (with the exception of insurance of the property secured by the loan), however, this may lead to the interest rate increasing or the client being denied a loan against another plausible excuse.

The bank imposes insurance - what to do?

So what should you do if the bank forces you to take out insurance? If this is insurance of property secured by a loan (mortgage), then it will not be possible to refuse insurance. In other cases, everything is at the discretion of the client. But first you need to decide whether insurance is as unnecessary as it seems.

Due to the tightening of requirements for insurance companies, an insurance policy has become a good way to protect yourself and your loved ones from unforeseen situations. With a long-term loan, life and health insurance is a fairly justified investment.

However, if the borrower has firmly decided to refuse insurance, but is afraid that he may be refused a loan or the interest rate may be increased, you can terminate the insurance contract after signing the contract with the bank.

Insurance legislation uses the concept of a cooling-off period. This is the time during which you can easily cancel an unnecessary insurance policy (currently the cooling-off period is 14 days from the date of signing the insurance contract).

In order to receive a refund, you must contact the insurance company with an application to cancel the insurance contract. It should be remembered that the insurance refund amount will be less by the number of days that have passed since the insurance policy was issued.

An important point is that the cooling-off period does not apply to group insurance.

Also, if you repay the loan early, you can contact the insurance company for a refund (with the exception of collective insurance).

Is it legal for a bank to terminate a contract if it refuses insurance?

Formally, the bank cannot terminate the loan agreement if it refuses to take out an insurance policy. However, it should be understood that the insurance contract is a kind of guarantor that the loan will be returned to the bank. In case of refusal to take out insurance, the bank, in order to protect itself, has the right to raise the interest rate at which it issues a loan.

To do this, the loan agreement contains a clause stating that in case of failure to fulfill insurance obligations, the bank has the right to raise the interest rate and even terminate the agreement.

Consumer loan - do you need insurance?

When obtaining a consumer loan, insurance is not required, but nothing can prevent the bank from refusing to issue a loan (under any plausible pretext).

Advice from lawyers on credit and insurance (video):

Insurance in the banking sector is an opportunity to minimize the risk of non-repayment of funds, as well as a way to issue a loan at a lower interest rate. In this case, insurance is voluntary, and you can refuse it if you wish (with the exception of insurance of property secured by a mortgage loan).

If the bank from which the borrower plans to take out a loan insists on issuing an insurance policy, it can either be issued and then easily terminated within 14 days, or you can choose another more loyal bank. It is worth remembering that insurance is beneficial not only to the bank, but also to the borrower, as it will allow you to protect yourself and your loved ones in the event that it is impossible to repay the loan due to an unforeseen situation.

Waiving loan insurance: step-by-step instructions. How to cancel insurance after receiving a loan?

Recently, most consumers perceive insurance as an imposed service. However, banks everywhere continue to promote both their own insurance products and those belonging to partners. Of course, now the schemes have changed significantly. They are usually used in relation to legally weak borrowers who consider an insurance contract necessary and are forced to make a choice - take what they give, or leave without money at all. Every borrower should know how to apply for waiver of insurance.

However, there is another important factor that makes people agree to insurance. The fact is that the bank’s credit conditions are often formed so that products with the inclusion of insurance seem more favorable to the client in terms of interest rate, loan duration and amount. The borrower thinks he has made the right decision, but in reality the total amount of the bank's funds, plus interest and insurance, comes out to be larger than the debt with higher interest, but without insurance, which is a typical marketing ploy that is very effective. We have to find out whether it is possible to waive insurance after receiving a loan, and if so, how.

Insurance Law

More recently, when applying for a loan and signing an application for insurance, a person was practically unable to reverse the move. Further appeals to the bank and the relevant companies were rejected with a categorical refusal: since the application was signed by the borrower himself, then his action was deliberate and voluntary. This problem was resolved through the courts, but only if the person could prove that the service was being imposed.

Only a small number of financial institutions, as an exception, provided the opportunity to cancel bank insurance and return the money for it within a few days.

On June 1, 2016, the Bank of Russia, which also regulates the insurance market, made an announcement that citizens who purchased the policy could return it and withdraw the money paid. For this purpose, a so-called cooling period (five days) was introduced. During this period, the client could change his mind and contact the insurer, who is obliged to return the money to him. Legal insurance refunds are carried out very quickly, the money is transferred to the applicant within ten days.

In addition to refusing insurance, the new law allows clients to disagree with various additional services that are imposed by the relevant organizations. However, in this case the risk of the financial institution increases significantly. That is why banks increase interest rates or reserve the right to change them if the client refuses. And this path is prescribed in the loan agreement. This often stops borrowers from taking active steps. If the client does not agree to take out insurance, banks are reluctant to return his money. However, this is still possible, even if the whole process will be accompanied by long debates with the financial institution.

A sample waiver of loan insurance is presented in the article.

What types of insurance are refundable?

In the field of lending, there are both voluntary and mandatory types of insurance services, which include policies such as:

• Real estate insurance, relevant for loans secured by real estate, mortgages, where the collateral must be protected.
• CASCO, when, when taking out a car loan, the bank obliges the client to insure the purchased car - transport as collateral gives the bank financial protection. So how do you process a waiver of insurance after receiving a loan? More on this later.

All other types of services accompanying the conclusion of a loan agreement are voluntary.

Insurance can be refunded in cash, trade credits, credit cards, etc., which are accompanied by:

• client life insurance;
• title insurance;
• insurance policy in case of layoffs at work;
• protection against financial risks;
• insurance of the borrower's property.

Insurance is legal in any case, since it is an additional service offered to the client when concluding a loan agreement. If it is not on the list of mandatory ones, the borrower can refuse it legally. True, such a choice will lead to a negative decision in issuing money. When a bank offers insurance, the law is not being violated in any way.

Is it possible to refuse insurance?

It is possible to cancel insurance, but it is not easy to do. Some borrowers even sue creditors for their right to this action, but this option is not suitable for everyone, and the likelihood of losing is not canceled, since bank employees can easily turn the situation in their favor. At the same time, the client can ask his lender about whether it is possible to write an application to waive loan insurance several months after the contract is drawn up and payments are made on time. But such a procedure can be carried out only when a simple consumer loan is taken out

Subtleties in the law on the cooling period

The recently passed law does not affect collective agreements. It is valid only if an agreement is concluded between an individual and an insurance company. This is why banks often sell additional services as part of a collective agreement (in fact, the bank acts as an insurer), and the return of insurance during the cooling-off period becomes impossible.

Available ways to cancel insurance

Many people think that insurance is a mandatory procedure when taking out a loan. However, Russian legislation affirms the voluntary nature of the insurance contract. The catch is that a financial institution can refuse a loan even without specifying a reason.

Most often, clients are given this alternative:

• A program with a low interest rate and mandatory insurance.
• Higher interest rates and no insurance.

Many are afraid that option number 2 is unprofitable. And therefore they themselves agree to additional services that they do not need. But it often happens that the increased interest is cheaper than the insurance policy payments, which can be up to 30% of the total amount.

If the client has chosen the first path, he has the right to receive a loan and then legally issue an insurance waiver (sample application below). When the application is approved by the bank and the agreement is signed, the borrower may consider payment for additional services unjustified and cancel it.

There are two ways to cancel your insurance policy:

• by contacting the bank with a written request;
• through the court.

A refusal can also be issued if the loan has been repaid regularly within six months. To do this you need to do the following:

• Contact the bank's credit department.
• Make a written request to terminate the insurance contract.
• Wait for the bank's response.

In many cases, financial institutions respond positively to such requests from clients, if there are no late payments for the entire period and there are no insurance cases. Then the bank recalculates interest rates and increases them to compensate for the risks.

A financial institution can carry out recalculation only if this is provided for in the agreement. Otherwise, the client will refuse his request.

Documents for going to court

If the bank does not accommodate the borrower, it is possible to refuse insurance on the loan through the court. In order to file a claim, the following documents are needed:

• loan agreement;
• insurance policy;
• bank refusal in writing.

It is imperative to provide evidence of the imposition of insurance services, so it is better if all conversations with bank employees are recorded on a voice recorder. To increase your chances of winning, it is advisable to enlist the support of a professional lawyer if the client is not sufficiently competent in legal subtleties.

The chances of winning the case are quite high: you just need to prove that the insurance policy was imposed by the bank fraudulently (for example, by including it in the monthly premium without warning). If a program with low interest rates and insurance was chosen voluntarily, it will be much more difficult to refuse.

Features of the return of funds deposited under insurance

The new legislation provides that refusal of loan insurance during the cooling-off period guarantees that the bank will return the funds spent on purchasing the insurance policy within ten days.

It is also possible to satisfy the client’s request if there is no insurance case during the cooling-off period. Since the policy does not always take effect immediately after signing the contract, the amount of funds returned may be full or partial. If the insurance contract has not yet taken effect, the premium amount is refunded in full. Otherwise, the amount for the past time is deducted from the funds, and the company has every right to do this, since the service was provided.

Features of insurance return after a cooling period for an outstanding loan

If the cooling-off period has already passed, the registration of the service does not fall under the new law. There is no need to rush to file a lawsuit to cancel insurance (many people download a sample application on the Internet). It's better to try contacting your bank. Many organizations are now very loyal to customers and give them the opportunity to refuse additional services even later than five days. This is how VTB 24 banks operate (under agreements executed before February 1, 2017), Home Credit, and Sberbank (30 days).

If you send a claim to an organization, it will almost 100% be rejected, justified by the fact that the client himself signed the application. In this case, the borrower, confident that he is right, can only go to court, and it is better to do this through lawyers who can suggest some loopholes. However, in reality it is very difficult to return the money, because the person himself agreed to the service and even paid for it.

Early repayment and return of insurance

Is it possible to return the insurance if the loan is repaid early? Since the policy is issued for the term of the loan repayment, a person who repays it in full ahead of schedule is entitled to receive a portion of the insurance fee. If the loan was taken out for two years, and 60,000 rubles were paid for insurance, then if it is paid off after a year, 30,000 rubles are supposed to be returned. In general, you need to contact the bank with this question.

An application for a refund is drawn up either when an application for early repayment is written, or immediately after closing the loan. To resolve this issue, the bank can refer the client directly to the insurance company. There he can also request a sample application for refusal of insurance.

Should I act on my own or contact a lawyer?

If you return the insurance within the five days required by law, you will not need the help of a lawyer. But after this period, the process will become complex and in some cases impossible. If you receive a refusal from the bank, it is still worth seeking qualified legal assistance, since a specialist will be more competent in this matter.

To avoid such delays and unplanned expenses for hidden insurance, you need to carefully study each clause of the loan agreement, since some banks may take on the deduction of insurance premiums. Therefore, it is worth spending time studying the contract to avoid financial problems and litigation.

Then a sample application for waiver of loan insurance will not be needed.

Is it possible to refuse insurance when receiving a loan or after?

NavigatorBankov.ru > Loans > Is it possible to refuse insurance when receiving a loan or after?

Banks offering consumer loans include the purchase of an insurance policy in the contract, thus reducing the bank’s risks. But insurance is a voluntary service for everyone. On the website of the banks Renaissance Credit, Sberbank of Russia, VTB and others there is information that the purchase of an insurance policy is an additional service, which can only be issued with the prior consent of the client, so you can refuse credit insurance. Now let’s look at some of the nuances and find out whether this can be done after receiving a loan and upon receipt.

What benefits does taking out insurance give to the bank and the client?

Taking out an insurance policy minimizes the risk of the bank losing its money. This service is useful when issuing large sums for real estate or cars. Despite this, bank employees oblige the borrower to buy a policy even when applying for a consumer loan for goods, without missing out on the chance to earn money by promoting their services.

The client, by purchasing an insurance policy, can protect himself and his loved ones from paying off the debt in the event of a force majeure event.

What cases does this apply to:

1. Loss of work and regular financial income . For example, the bankruptcy of the company in which the person works or his dismissal from his position. In case of voluntary dismissal, the client is obliged to repay the debt on his own.
2. Deterioration of health, death . According to the clauses of the agreement, the insurer covers all financial expenses of the policyholder.

What benefits does taking out insurance give to the bank and the client?

According to the laws “On the Protection of Consumer Rights,” banks are prohibited from imposing the purchase of additional goods to obtain other services. To avoid troubles in the future, if such a situation arises, you need to record a conversation with an employee who illegally insists on purchasing a product.

Mandatory and optional types of insurance

It is necessary to familiarize yourself with the types of insurance before deciding to refuse the service.

Mandatory types of loan insurance include:

• Purchasing a life or property insurance policy when taking out a mortgage;
• Registration of insurance of the collateral when receiving loans with collateral.

Based on the mortgage law, the borrower must take out collateral insurance in an amount not less than the obligation provided. This applies to all secured loans. In this case, you cannot refuse the service, otherwise the bank will refuse a positive decision on the application. There are exceptions: when making a down payment of more than 30-50% of the loan amount, banks provide more favorable lending conditions.

Credit products with optional insurance:

It should be taken into account that conditions may differ for bank clients and non-clients.

Having open accounts, a salary card, and deposits increases the chances of getting a loan without concluding an insurance contract.

A clean banking history increases your chances of getting a loan at favorable interest rates. For clients who do not have bank products issued, the conditions for obtaining a loan change and the interest rate increases by 2-4%. Also, some banks have various products with and without insurance. So, for example, when purchasing an insurance policy from VTB, the interest rate will be significantly lower, and personal offers are provided only with insurance.

How to cancel insurance

A competent person knows that before signing agreements, they need to read them completely and clarify unclear questions and words. This is the only way to avoid pitfalls. Upon consultation with the manager, he assures that you can only be guaranteed to receive a loan when purchasing a policy. Why is he doing this? Each bank employee has a plan (points) that must be completed throughout the month. After completing the plan, each employee receives rewards in the form of a salary bonus. This is why there is a systemic “steaming” of products.

Cancellation of the insurance policy when receiving a loan

The method of refusing insurance when receiving a loan is the simplest; to do this, just ask the manager for a payment schedule and pay attention to the total amount to be repaid. If insurance is included in the price, the total loan amount will differ from the price of the item. At this stage, you can cancel your insurance policy. The bank does not have the right to refuse to receive a loan, arguing that you do not want to take out insurance. Yes, indeed, banks such as VTB reserve the right to increase the interest rate on the loan to 4%.

If you are in doubt about what is more profitable, buying a policy or paying a 4% higher rate, contact a specialist. He will provide the amount of overpayment for each option, and you will determine the optimal one for yourself.

Cancellation of the insurance policy when receiving a loan

Waiver of insurance after receiving a loan

The transaction has been completed, the terms have been signed, in this case, you can cancel the insurance within 14 calendar days after receiving the loan. According to the instructions of the Central Bank of Russia, citizens who have taken out an insurance policy can cancel the contract and return the money paid.

A cooling off period is the name of a legal way to terminate a deal.

You must fill out the form and register it at a bank branch or submit it to the insurer. The period for consideration of the application and refund is from 10 to 14 days.

The application form can be drawn up in free form or you can take a ready-made template on the website of the insurance company from which the policy was purchased. It is necessary to submit an application to the insurance company no later than the specified period with the following data:

• passport number, series, date of issue, authority issued by;
• Full name of the borrower;
• contract number and date;
• rejection reason;
• date of compilation, signature.

This method is available exclusively for an individual contract. There are also collective insurance contracts. What is their difference?

Application for cancellation of the insurance contract

With individual insurance, the transaction is concluded by the policyholder and applies only to him and his family. Such a transaction can be canceled during the “cooling off period”. In a collective agreement, the legal entity becomes the main one. a person who insures citizens with whom he has financial transactions. Such conditions are concluded between the borrower and other persons applying for loans at a particular bank. The collective insurance transaction is not subject to termination. An individual - the policyholder, after signing the agreement, assumes all obligations to pay for such a policy.

The contract clearly states the type of insurance, so you should definitely pay attention to it.

Waiver of insurance for early loan closure

The first thing you need to do after repaying the loan ahead of schedule is to read the terms of the deal. Find the relevant insurance clause and understand whether it is possible to reimburse the amount if the contract is closed early.

You can submit an application for consideration provided:

• early closure of a credit transaction;
• no overdue loan payments;
• absence of insurance cases;
• if the contract specifies a clause on the possibility of returning the insurance premium.

Insurance issues are entirely handled by the insurer, not the bank. Banks are intermediaries between the borrower and the insurer. And they have nothing to do with reimbursement of the amount paid under insurance.

One of the individual insurance programs allows a 50% refund if the transaction is terminated within 30 days. However, not all insurance companies agree to this.

Refuse insurance for early loan repayment

Firms whose contract states that the insurance amount is reduced in proportion to the loan amount are not subject to refund. What does this mean? In case of early closure, the loan amount is zero. Accordingly, the remainder of the insurance is also cancelled. In other cases, only a partial refund of the insurance premium is possible. The amount is determined by the difference between the end of the loan agreement and the early repayment date. The insurance company independently decides whether to return the amount if the contract is terminated early or not. It should be understood that a loan agreement and an insurance agreement are two completely different agreements.

When closing the loan, the insurance continues to be in effect, and if the insured event occurs later, the entire insured amount will be paid to the client or his heirs.

Refusal of insurance in court

Returning to the law “on the protection of consumer rights”, which states that the bank is prohibited from requiring the client to register any products, we can draw a conclusion.

1. Sign the contract only after detailed study.
2. Pay attention to the total amount to be repaid.
3. Clarify to yourself all the information in the fine print.

If all of the above steps did not help you achieve results from the bank, you should go to court.

Refusal of insurance in court

Grounds for going to court:

• premature closure of a loan transaction;
• refusal to return the amount by the insurer;
• absence of insurance cases;
• forced registration of insurance;
• monthly payments were paid on time without delays;
• the presence of overpayments on payments (that is, you paid an amount more than indicated in the payment schedule);
• the contract provides for the return of the insurance payment;
• individual insurance contract.

Before going to court, you need to collect a package of documents:

• passport or other equivalent document (originals and copies);
• completed application;
• loan agreement;
• refusal of the insurance company to return funds (in written or audio format);
• a certificate from the bank confirming full early repayment of the loan;
• insurance payment receipt.

It is also necessary to file a claim. We indicate the information:

• surname, name, patronymic of an individual;
• defendant's details;
• claims of an individual against the insurer;
• confirmation of the insurer's guilt;
• all calculations, payment receipts;
• date, signature faces.

The claim is considered within one month. The judge gets acquainted with the case materials, studies the conditions, all additional agreements on which the transactions were signed. After the expiration of the period, a decision in favor/refusal of the claim is announced. It is worth noting that the number of court hearings may be unlimited if the insurer challenges the decisions. It is important that the plaintiff has strong evidence of the imposition of this service.

The optimal period for canceling insurance and whether it is necessary to do so

Analyzing all types of insurance, we determine that obtaining insurance is an optional procedure. With the exception of lending with collateral or execution of a mortgage agreement.

In this article, we have clarified questions about how to cancel insurance products. But is it worth refusing in all cases except compulsory insurance? Having analyzed the statistics in Russia in the period from 2016 to 2017, the level of overdue debt began to decline from 9% to 7% as of 2018.

Can you be 100% confident in your health and financial situation in 6-12 months? If yes, great, you can be envied. Those who cannot confidently answer this question should not refuse additional insurance in order to ensure reliability and safety for themselves and their loved ones.

What are the advantages of additional insurance?

1. If you lose your job, the insurance company undertakes to pay off the debt on your behalf.
2. The occurrence of an accident, loss of solvency - in such circumstances, the insurance company covers the costs described in the loan agreement.
3. Your family and friends will be released from the obligation to pay the loan debt upon the occurrence of an insured event.
4. Confidence in the future.

If you decide not to purchase an insurance policy, it is best to terminate all agreements according to the legal period. During the 14 day “cooling off period” or within the period specified in the contract. Timely refusal of insurance frees you from unnecessary clarification of relations with the insurer and going to court.

What do you think, should I refuse insurance or not? Leave your comments, share your opinions and ask questions. Leading experts in the financial sector will help you understand the nuances of the problem.

How to opt out of loan insurance

How to cancel loan insurance? Can this always be done or are there obligations that still have to be fulfilled? Will the money already deposited be refunded? When is it possible to cancel insurance? And how to arrange it? Financer.com experts have compiled detailed instructions for all occasions.

Is it necessary to insure a loan?

As part of lending, there is mandatory and optional insurance.

• Mandatory – real estate insurance when applying for a mortgage loan and car insurance when applying for a car loan.
• Optional – life, health, disability, title, and other risks insurance as part of any loan offers.

The mandatory form is established in accordance with the current legislation of the Russian Federation. That is, without such a policy, the bank simply does not have the right to issue a loan.

Optional options are one way or another designed to protect the lender from losses if the borrower is unable to repay the debt due to health reasons, job loss, or other reasons.

Is it necessary to take out credit insurance when we are not talking about options prescribed by law?

No one can force a borrower. But most banking programs provide for a rate reduction if you have such a policy.

Is it possible to refuse loan insurance?

Yes. According to current legislation, the borrower has the right to cancel loan insurance within 14 days after the loan is issued .

How to opt out of loan insurance in 2019?

To refuse, you need to submit an application - in any form or according to the sample. In general, there is no statutory form. You can use a sample application for waiver of loan insurance

But just in case, it is better to check with the bank whether a certain form exists.

What information must be indicated in the application for refusal:

• passport data
• contract details (number, date of conclusion)
• reason for termination of the insurance contract

The application will also need to be accompanied by a copy of your passport, a copy of the contract and a document confirming payment for the insurance policy.

A set of documents (including an application for waiver of loan insurance) must be submitted to the bank. Better - in person. The second option is by mail, necessarily by registered mail with a list of attachments. In the first case, do not forget to receive a document confirming that your application was accepted.

The second option may be less profitable, because it will take several days for the letter to reach the banking institution. And the refund is calculated minus the period of actual use of the insurance. That is, the earlier the documents are submitted, the greater the refund.

After submitting the application, the insurance premium must be returned within 10 days.

In reality, creditors often delay making a decision. If a decision is not made within 10 days and the funds are not returned, submit a new request. According to reviews, on average money is returned within 1 month.

In case of non-compliance with rights, the borrower can file a complaint with Rospotrebnadzor, through the State Services portal or with the Central Bank of the Russian Federation (depending on whether his claim is directed towards an insurance company or a banking organization).

What to do if refused?

• Contact Rospotrebnadzor

If the insurance company refuses to accept the application, return the funds, or delays the deadline, you can file a complaint with Rospotrebnadzor. If we are talking about bank insurance, you can also file a complaint with the Central Bank of the Russian Federation.

• Going to court

The second option is to file an application with the court. Attach all documents confirming that you tried to resolve the issue, but achieved nothing. In this case, regardless of the period that has passed since filing the application, if the court makes a positive decision, you will be returned the entire insurance amount.

Will there be any consequences?

The main fear about refusing credit insurance is whether there will be consequences from the lender.

The leading fears are:

• demand to repay the debt immediately
• rate increase
• fines
• worsening conditions

First of all, there can be no fines. The bank also does not have the right to refuse you a loan and demand that you immediately return the entire amount.

With percentage, things are a little more complicated. Consider this example below.

Will the interest rate on the loan increase if I refuse insurance?

The bank has the right to do this ONLY if this condition is stated in the agreement. Read the terms and conditions carefully.

But even in this case, the increase in interest is not due to the fact that you terminated the contract with a specific insurance company, but because of the lack of insurance itself.

How to avoid a raise?

Reissue your insurance certificate with another company. The secret is that direct contact with the insurance company is cheaper in 90% of cases. Moreover, the difference can reach up to 5–10 times.

Choose the optimal insurer, conclude an agreement and bring a copy to the bank. That's it, now you have an issued policy, but it costs significantly less.

Formally, the bank may object if the selected company is not approved by the credit institution and is not on the list of accredited ones. But such quibbles are very rare. In addition, there are organizations (like Ingosstrakh) whose policies are accepted everywhere.

What pitfalls need to be taken into account?

• Collective insurance

If it is quite simple to refuse insurance on a loan, issued through a direct agreement with the insurer, it is most often possible to return funds from the so-called collective insurance only through the court.

What is the essence of the program? The borrower is not “connected” directly to the insurer, but is attached to the agreement between the insurer and the bank. It turns out that you specifically do not have direct interaction with the insurer, but only a relationship with a banking organization. Therefore, you can no longer terminate the insurance contract without canceling the loan.

Some banks think so, but not the court. Since 2016, many court cases have been decided in favor of borrowers. Therefore, if a creditor tries to convince you that the case has failed, do not hesitate - go to court.

• Noname company

The contract is concluded with a certain insurance organization “Horns and Hooves”, about which almost nothing is known. The site is missing. It is unclear where they are located. The bank, naturally, denies it, accepts the refusal statement, but says that the borrower must resolve further questions regarding the return of funds with the insurer.

You contact the company, and they say: “We don’t know anything. We can cancel the policy, but we won’t return the money.”

In this case, the issue can also be resolved through Rospotrebnadzor or the court. But we advise you to exclude such a risk in advance and carefully look at who the bank has “appointed” as the insurer in your case. The company must be well-known, well-known, and included in the top ratings.

Such an organization will not want to risk its reputation and with a 90% probability will return every penny.