Even if they refuse: the expert told how to terminate a life insurance contract on a loan and get the money back

When concluding a mortgage agreement, banks usually strongly recommend entering into another one - life insurance. Otherwise, they promise less favorable loan terms.

Is this recommendation legal? Is it possible to refuse “voluntary” insurance? And how to return life insurance on a loan if the loan amount was paid to the bank ahead of schedule? Insurance expert Inna Vyalkova these questions to the FAN

Photo from the personal archive of Inna Vyalkova /

Why do banks impose insurance?

For any bank, this is an excellent and simply inexhaustible channel for generating additional income. Hundreds of millions of rubles are circulating in this area, which bankers receive from insurers as payment for selling policies.

The profit is simply colossal. Out of a thousand issued loan agreements with insurance, a maximum of 5 will be “shot.” ​​These 5 borrowers or their heirs will receive compensation when an insured event occurs, and the remaining 995 will pay for nothing.

In fact, insurance is not imposed by the bank itself, but by its representative, that is, the manager who accepts the loan application. And this happens for a reason. Banks initially put employees in such a position that they are forced to literally force borrowers to sign insurance contracts.

Personally, in my case it was like this:

1. I received a premium for insurance only if 95% of the loans I issued in a month were issued with the inclusion of insurance services.
2. If I did less than 95%, not only will I not receive a bonus, but questions will also arise for me - am I such a good employee if I cannot fulfill the plan?

So managers who hold on to their jobs and want to earn money have to somehow get out of the situation and issue maximum loans with insurance. Moreover, the management says that it is impossible to deceive clients, but at the same time creates such conditions that managers are forced to do this. Well, then the employee if something happens is extreme.

Required documents when returning insurance

The policyholder needs to prepare the following documents:

1. Identification.
2. Application for cancellation of the Insurance Contract.
3. Original insurance policy.
4. Loan agreement and certificate of no debt to the bank (in case of early repayment of the loan).
5. Receipt for payment of insurance premium.
6. Bank account details for transferring money.

You only need to give copies of documents to the insurance company. Originals are required for verification. They may come in handy later. For example, when going to court.

Does the bank have the right to impose insurance?

Theoretically, of course, he does not have such a right. The Central Bank is clear that voluntary insurance policies must be purchased by borrowers at their will without influence. But this is just a theory. In practice this practically doesn't work. The reason is that the fact of imposition is almost impossible to prove in the event of a trial.

It turns out that the borrower signs the insurance application of his own free will. His signature means that he has read all the clauses of the agreement and agrees with them. What complaints can there be later: here is your signature!

Standard tricks that managers use:

1. Insurance is included in the loan by default. Almost no one reads the signed papers—that’s a fact. In my practice, out of 1000 loans issued, maybe only 2 people carefully studied what they signed. The rest are simply glad that they were approved and are in a hurry to get the money.
2. They say that without insurance, a loan cannot be issued. This is a blatant lie: if a client complains, the manager will not be patted on the head. However, such assurances are still often heard.
3. They say that without insurance, the loan will not be issued. In practice, if the client is of high quality, the bank will give him approval in any case. For lack of insurance, the scoring score is reduced, but not significantly.

Only collateral insurance is required when applying for secured loans. Life, health, and job loss insurance are all voluntary paid services.

Reaction of popular banks to insurance refunds

The attitude of the main banks to the issue of refunds:

Note. You can apply for a refund at Alfa-Bank online.

As you can see, most insurance companies adhere to the regulations of the Central Bank of Russia regarding a 14-day 2 cooling period.

How to behave in a bank

First, think about whether you still need this service. Typically, the loan comes with life and health insurance for the borrower. That is, if the borrower dies during the life of the loan, his heirs will not owe the bank anything. Or if the borrower's health seriously deteriorates, he is also exempt from payments.

But at the same time, you need to carefully read the insurance contract that you sign. Carefully study the list of insured events. Some may not be included in the list. For example, insurance does not pay in the event of suicide, death/illness due to addiction, or if at the time of concluding the contract the client had some serious diagnoses, etc.

If you realize that there is no need for a policy, immediately prepare for the fact that the bank will impose insurance. Some do this especially persistently, for example, Vostochny Bank, UBRD, Sovcombank. Even Sberbank is very intrusive in this regard.

What to do if the manager begins to impose loan insurance:

1. State your position in advance. Immediately tell the manager that you do not need insurance. And be prepared for the fact that they will immediately start telling you about the benefits of insurance. In fact, its imposition will begin.
2. If the manager is too active in this matter, does not accept the application, continues to persuade you, ask to call management. There is always a leader in the department. Although he is also interested in selling policies, he will definitely not violate anything.
3. Call the bank's hotline directly in front of the manager. He won't need problems, so his ardor will quickly fade away.

When signing a loan agreement, in any case, study the documents. Look at how much is spent on credit.

How insurance returns affect the loan rate

The bank is interested not only in returning the loan money, but also in making a profit. The size of the loan rate depends on the chosen organization, the type and amount of the loan, the amount of the down payment and the credit reputation of the borrower. This also includes having insurance. If you refuse to purchase a policy, the loan rate may increase - from 1% to 7%. Details are specified in the loan agreement.

You can make preliminary calculations of the amount of overpayment on the bank’s website. Just use an online calculator. The user needs to compare the calculation results with and without insurance.

The increased interest rate allows banks to compensate for losses in the event of late repayment of borrowed money.

How I refused insurance services

As an example, I will give situations that I personally encountered as an active user of credit services. In general, in reality it is not always outright imposition that appears. If the borrower behaves confidently and gives a categorical refusal, the manager will accept his desire as inevitable.

Renaissance

I applied for a simple cash loan through a bank office. The manager began to insistently push for insurance and simply did not start submitting the application for consideration.

As a result, I had to call the bank's hotline and complain about this intrusiveness. There, the operator also began to talk about the benefits of insurance, but still made it clear that the employee was acting unlawfully.

At the end of the conversation, I approached the manager, he heard the end of the dialogue. He had to accept defeat and accept my application without insurance. The Renaissance loan was successfully approved and issued.

Trust

Now this bank no longer issues loans to individuals, but used to actively lend. Here I was faced with a very serious imposition of a service. I took out an urgent loan, and the manager put pressure on this: he would not accept an application without insurance. Moreover, we were not talking about life insurance, but about real estate...

In the end, I made a cunning move. I said okay, I'll buy insurance. The manager happily sent the application for consideration, it was approved immediately, I signed the contract and received the money. But I simply refused to sign the insurance contract and pay the insurance premium (I was supposed to pay using the funds from the issued loan).

But this option is only relevant if the policy is paid for separately and is not included in the body of the loan.

Alfa Bank

With this bank I had an unsuccessful refusal of the insurance imposed by the bank. The whole point is that I applied for a POS product loan at a household appliances store. I immediately told the manager not to include insurance in my credit. She spoke categorically so that there would be no imposition.

As a result, the manager said that the bank refused me. Only now I had my suspicions... She somehow quickly filled out the form and asked an incomplete list of questions. And I’m a positive client, I constantly took out loans from Alfa.

Since I myself was then a representative of Alfa-Bank, only for a different product, I looked at the situation for me through my channels and simply did not see my application in the database. The manager, apparently in order not to spoil her insurance statistics, simply did not send my request for consideration. It also happens…

Sberbank

My brother took out a cash loan to buy a car. I submitted the application myself and went with me to sign the contract. He is just one of the army of borrowers who do not read anything and do not particularly understand financial documents.

I asked to read the contract before signing. And to my surprise, instead of the 200,000 rubles issued on credit, the contract showed an amount of about 230,000. It was my brother who was forced to insure the loan. But he didn’t even understand - a standard case.

I pointed this out to my brother, who began to declare that he did not need financial protection (as it is called in Sberbank). Even the head of the department came with her persuasion. But the loan had already been approved, so Sberbank employees had to simply remove the insurance and issue a “naked” loan.

If the bank nevertheless imposed life insurance

Bank managers are trained, they are taught to sell insurance policies, so borrowers often succumb to persuasion and buy a service that they did not seem to need in the first place.

The Central Bank, knowing the situation with the imposition of loan insurance, introduced a cooling-off period in insurance. The buyer of a voluntary, optional policy has 14 days to file a claim with the insurer and get the money back. The main thing is to meet the deadline.

How to get a refund under group insurance

Insurance can be individual or collective. In the second case, the policy is issued to a group of people at once.

With collective insurance, citizens enter into an agreement not with the insurance company, but with the bank. In fact, the client joins the current contract, which is drawn up between the insurer and the bank. Making a return under such an agreement is quite problematic. You can achieve a result only through the court (Decision of the Supreme Court of the Russian Federation dated October 20, 2019 in case No. 58-KG20-5-K9).

FAQ

What to do if the bank imposed insurance?

If you realize that you do not need it, within 14 days from the date of signing the contract, you can contact the insurance company and write an application to refuse the service. The money will be returned to you and transferred to the bank account specified in the application.

How to refuse imposed insurance if more than 14 days have passed?

Unfortunately, this is no longer possible. The only option is to close the loan early and return the money for the unused insurance period.

The manager does not accept an application without insurance, what should I do?

Such imposition of a service is illegal. Ask to invite management, demand a complaint book, declare your intention to call the hotline. This usually works and the manager gives up.

Why did they give me 100,000, but the contract says the amount is 115,000?

This difference is the cost of the insurance services you purchased. The price of the policy is included in the loan, and interest also accrues on it.

Is life insurance required for a mortgage?

If you refuse it, the mortgage will be issued at higher rates. So take your time, do the calculations. Plus, since the loan is long, insurance can really come in handy.

Sources:

1. Central Bank: Cooling off period" in insurance.

about the author

Irina Rusanova - higher education at the International East European University in the direction of "Banking". Graduated with honors from the Russian Economic Institute named after G.V. Plekhanov with a major in Finance and Credit. Ten years of experience in leading Russian banks: Alfa-Bank, Renaissance Credit, Home Credit Bank, Delta Credit, ATB, Svyaznoy (closed). He is an analyst and expert of the Brobank service on banking and financial stability. [email protected]

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Legal assistance in recovering credit insurance

You can contact the insurance company yourself or through an intermediary. The first option is less expensive. However, if the insurer or bank refuses to pay the money, the insured person will have to go to court. In this case, you cannot do without a lawyer. The procedure will take from 3 to 6 months.

Sometimes lawyers are able to convince the insurance company to return the money out of court. This saves time and money on fees and legal costs. Lawyer services are paid in the form of an advance or upon receipt of payment from the insurer. In this case, the plaintiff can recover the money spent from the defendant in the case.

Comments: 2

Your comment (question) If you have questions about this article, you can tell us. Our team consists of only experienced experts and specialists with specialized education. We will try to help you in this topic:

Author of the article Irina Rusanova

Consultant, author Popovich Anna

Financial author Olga Pikhotskaya

1. Vladimir
   10/12/2021 at 00:47 Hello. Please tell me, if I refuse life insurance within 14 days, does the bank have the right to raise the loan interest rate? I asked a question earlier. I don't see the answer. Is this a scam?
   Reply ↓ Anna Popovich
   10/13/2021 at 01:59

   Dear Vladimir, the rate can be changed if the corresponding condition is specified in the loan agreement.

   Reply ↓