Borrowing without borrower insurance is perfectly legal in France. No law makes it compulsory, whether for a consumer loan or a mortgage. It is the bank that asks for it, because the policy repays the debt if you die. A retiree who can no longer get cover therefore has to offer the lender some other form of security, or choose a type of loan for which the bank does not ask for any.
The problem mostly appears after 75. According to the broker Magnolia, banks' own group policies rarely accept new members beyond 65 to 70, outside insurers go up to around 75 to 80, and almost nobody insures past 85. A serious illness can shut the door much earlier. Solutions still exist, and which one fits depends on the amount you need and what you own.
Why insurance weighs so heavily on a retiree's file
For someone in work, the policy covers death, disability and inability to work. Once you are retired, only the death cover and the PTIA (total and irreversible loss of independence) still matter, because there is no income from work left to protect. The insured risk is almost purely death, and its probability climbs quickly with age, hence the high premiums, loadings and outright refusals.
The protective schemes help little at these ages. The Lemoine law removes the health questionnaire only for loans that end before your 60th birthday. The AERAS convention, the industry agreement on borrowing with a serious health risk, does examine aggravated risks, but its most generous mechanisms target younger borrowers. Only the right to be forgotten, five years after the end of treatment for cancer or hepatitis C, applies at any age.
What happens to the debt if you die uninsured?
The outstanding balance becomes a debt of your estate. French heirs can accept the estate outright, accept it only up to the value of the net assets so they never pay more than they inherit, or renounce it. If the loan was secured by a mortgage or a pledge, the bank recovers its money from the property or the pledged savings, and the heirs never have to use their own funds.
Guarantees that can stand in for insurance
| Guarantee | How it works | Typical cost | Best suited to |
|---|---|---|---|
| Pledged assurance-vie | Savings earmarked for the bank until repayment | Simple deed, rarely significant fees | Retiree with a life-insurance policy or share account |
| Mortgage (hypothèque) | Your home secures the loan | About 1 to 1.5% of the amount, via a notary | Owner of a debt-free property |
| Personal guarantee | A relative promises to repay | Free, but commits the guarantor | Financially solid family |
| Younger co-borrower | A child signs and insures themselves | Depends on their policy | Shared family project |
| Separate life cover | Lump sum paid to heirs, who clear the loan | Premium based on age and amount | Retiree still insurable outside a loan policy |
Worked example with a pledge
Peter, 78, an American retiree living near Montpellier, has a pension worth €2,600 a month and a French assurance-vie of €40,000. He wants €25,000 to replace his car and help his granddaughter, and every insurer turns him down. His bank agrees to a five-year loan against a pledge on €30,000 of the policy. At an assumed 5%, the repayment is about €472 a month, or 18% of his income.
Why not simply withdraw the money? The policy keeps earning interest and keeps its inheritance-tax treatment: for premiums paid after the age of 70, only the amount above €30,500 is taxed, and the growth is exempt. Peter also keeps his rainy-day savings intact. If the policy is recent or earns little, a partial withdrawal may still work out cheaper, so ask for both figures.
Which loans can you take out without insurance?
For a small, short personal loan, many lenders will accept an application without insurance if your pension leaves a comfortable amount to live on. The cover is then presented as optional and you simply decline it. For a mortgage or a large sum, the bank nearly always asks for a substitute guarantee, typically a mortgage charge or a pledge.
Senior equity loans are built on exactly that principle: the value of the home replaces the insurance. The prêt viager hypothécaire, the French lifetime mortgage with no monthly payments, needs no insurance either, since it is repaid on death through the sale of the property. Both involve a notary, and the fees must be included in your calculation.
Shop around before giving up on cover
One refusal from the bank's insurer is not a refusal from the whole market. Since the Lagarde law you may choose another insurer offering equivalent cover, and since 2022 you can switch at any time. Insurers such as Afi Esca sell their own borrower policies, and specialist brokers query several companies at once, sometimes with higher age limits than the bank.
Steps to build a file without insurance
- Ask the bank's insurer to confirm its refusal or loading in writing.
- Request two or three outside quotes, for death cover only, before concluding it is impossible.
- List the assets you could offer: assurance-vie, share account, unmortgaged property.
- Propose a costed substitute guarantee to the bank that covers at least the amount borrowed.
- Compare the total cost: interest, deed fees and the return you forgo on pledged savings.
- Tell your heirs that the loan and its guarantee exist.
Mistakes that lead to refusal
Files often fail because the borrower opens by saying they want a loan without insurance and have nothing to offer in its place; the bank simply sees extra risk. Another mistake is playing down your health on a questionnaire to obtain cover. A deliberately false statement voids the policy, and your heirs end up unprotected.
Avoid pledging all your savings for a long loan, which leaves nothing in reserve if you later need care, and be wary of offers promising a loan with no insurance and no paperwork in return for fees paid upfront. A French credit intermediary may not be paid anything before the funds are released.
Other routes when no guarantee is available
With neither savings nor property, keep the amount modest. Options include supported microcredit, a pawn loan from the Crédit Municipal (France's public pawnbroker), or one-off help from your pension fund's social-assistance service. A son or daughter can also borrow in their own name and insure themselves. Postponing or splitting the project limits the capital exposed to the risk of death.
If your pension comes from abroad, check whether a life policy you already hold in the UK, Ireland or the US could be assigned or used as evidence of cover. French banks do not always accept foreign policies, but some will consider one if the insurer confirms the sum assured in writing.
Frequently asked questions
Can a bank refuse a loan because I have no insurance? Yes. It is free to lend or not, but it must accept outside insurance with equivalent cover and may, if it chooses, consider another guarantee.
Does my surviving spouse have to repay? If they are a co-borrower, yes, in full. If not, the debt passes to the estate, although depending on your marriage regime and their inheritance rights they may still bear part of it.
Is death-only cover enough? For a retiree it is often the only cover that matters. Banks generally accept it, since inability to work is no longer relevant to someone without employment.
Can I drop the insurance on a loan already running? You can change insurer at any time, but removing all cover requires the bank's consent, and it will then ask for another guarantee.
Organisations and offers to contact
- Magnolia, loan insurance for seniors : Borrower insurance broker setting out the maximum ages for joining and for cover ending, and comparing outside insurers that accept older applicants.
- Afi Esca, borrower insurance : Life insurer founded in 1923 that sells its own borrower policies as an alternative to bank cover, repaying the outstanding balance on death.
- Selectra, mortgage without insurance : Insurance comparison site whose guide explains how to borrow without borrower insurance and which alternative guarantees to put to the bank.