Borrower Insurance and Increased Risk

Borrower Insurance

In the context of the underwriting of loan insurance, one speaks of aggravation of the risk or of aggravated risks when the borrower presents a higher risk compared to the standard population of the same age. This risk may be due to his age or his lifestyle behavior (profession, sports practiced, leisure).

There are three types of aggravation of risk: serious health risk, aggravated occupational hazard and aggravated risk sports.


More on Aggravation of the risk

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This is a worsening of the health risk or aggravated health risk when a person is or has been diagnosed with a serious illness or chronic illness. This notion is evolutionary according to the ways of life and the evolutions of the medicine making insurable more and more diseases.

An aggravation of the professional risk or aggravated professional risk designates a risk presented by a person because of the profession which it exerts (fireman, policeman, stuntman).

Lastly, a worsening of the sporting or leisure risk, or aggravated risk of sport or leisure, concerns sporting activities or leisure activities that involve high risks (climbing, car racing, horse riding).

There is a device facilitating access to loans for people who present an aggravated health risk: the AERAS agreement (insuring and borrowing with an increased health risk). It was signed on February 1, 2011 by banks, insurance companies, patients ‘and consumers’ associations, and public authorities.


The word of the broker

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Banks tend to check the creditworthiness of the borrower to make a loan and generally require the borrower to take out loan insurance. This insurance protects him and his family in the event of death, disability, incapacity for work or unemployment. In case of refusal of loan insurance due to an aggravation of the health risk , and therefore a refusal of credit from the bank, the AERAS convention is triggered to find a solution to ensure the borrower. This feature allows up to 3 levels of file review.

Good to know: a borrower insurance with aggravated risk can cost more because to cover the specific risk, you will have to pay a premium.