When you want to borrow money to buy a property in Luxembourg, financial institutions often require you to take out outstanding balance insurance to cover your loan.

The purpose of this insurance is to protect your family against the risks of death or disability that would prevent you from being able to repay your loan.

The remaining capital is then reimbursed by the insurance and your home is paid for in full, keeping your family safe.

Outstanding balance insurance, a security for the banks and your family

Take out outstanding balance insurance is very often a mandatory condition for obtaining a mortgage from your bank.

This insurance is therefore spread over the entire duration of your loan repayment. The capital paid in the event of death or disability therefore covers the entire remaining balance of the loan.

It is a guarantee of security for the credit institutions, but it is also a guarantee for the subscriber who does not see his debt transferred to his family in the event of death or disability.

This means that your family and your heirs become the owners of the property and do not have to pay the remaining monthly payments.

When you take out a mortgage, this is the best way to reassure yourself, the lender and your family.

In Luxembourg, there are different formulas

The best thing to do to take out outstanding balance insurance is to turn to your insurance agent, who will be able to guide you through the process.

The insurance premium is calculated on a case-by-case basis and depends on the terms and conditions of the loan, such as the amount, duration and interest rate of the loan, but also on your borrower profile, such as your age, health, professional activity or practice of risky sports.

Secondly, the insurance premium can be a one-off and therefore included directly in the amount of the loan or you can opt for an annual premium. Very often the cost of the single premium is lower and can be deducted in part or in full from income tax.

To guide you, the AXA Joao Varandas agency, a dynamic team that puts all its energy into serving its clients, can guide you in the process of determining the product that best suits your situation 

Contact l'General Agency Varandas Joao
16 Rue de Bastogne, L-9010 Ettelbruck, tel: 26 81 13 31, joao.varandas.agent@axa.lu