Mortgage life insurance in Belgium: compulsory or not?

What mortgage life insurance covers

According to Wikifin, it is a temporary death insurance whose term follows that of the loan. If you die before you have repaid everything, the insurer pays the lender part or all of the balance, depending on the coverage percentage chosen. Its purpose is to protect your family from the remaining debts. If you are still alive at the end of the loan, you get nothing back.

The page we read does not present disability as part of this product. Check what your policy covers before you sign it.

The premium can be paid in one go before borrowing or spread out. If it is spread, it is generally fully paid by two-thirds of the term of the loan, according to Wikifin. The Code of Economic Law calls this type of contract an “ancillary contract” (contrat annexé): an insurance contract you take out in fulfilment of a condition of the loan.

Compulsory or not?

There are two levels to distinguish.

• The law does not impose it. Wikifin writes that mortgage life insurance is not legally compulsory.
• The lender can require it. Wikifin notes that the lender will often ask you to take one out before granting the mortgage loan. It is a condition of the loan agreement, not a general rule. If the lender makes it a condition, the text of the law provides that failure to meet this condition could make the loan immediately repayable.

Before signing, ask the lender in writing whether the insurance is a condition of the offer, and compare the sum insured, the term and the total premium across several quotes.

Free choice of insurer

Book VII of the Code of Economic Law contains the rule. Under article VII.146 § 2, second paragraph, the lender is prohibited from obliging the consumer, directly or indirectly, to take out the ancillary contract with an insurer designated by the lender. Article VII.147 prohibits tied selling, except bundled selling. We summarise these articles here without quoting their wording: their exact scope (for example, what the lender can require of an insurer you propose, and who bears the burden of proving free choice) should be checked in the text of the law or with Wikifin. Ask the lender, in writing, for the conditions it sets for an outside insurer.

Wikifin confirms that the lender cannot oblige you to take out these insurance policies with an insurer it has designated. You can therefore compare offers. A lender can, however, offer you a rate reduction if you take out the insurance with it. In that case, compare the total cost, with and without the reduction.

Right to be forgotten: if you have had cancer

The insurance act of 4 April 2014 contains a section on the “Right to be forgotten”. It applies in particular to insurance contracts that guarantee repayment of the capital of a mortgage loan or a business loan (art. 61/1).

For cancer, article 61/2 says the following:

• you no longer have to declare the condition once a period of 5 years has passed after the end of successful treatment;
• the end of successful treatment is the date on which active treatment ended, provided the cancer has not reappeared;
• if the diagnosis was made before you were 21, the period is 5 years at most;
• the consolidated text mentions that the period was reduced to 5 years on 1 January 2025.

In that case, the insurer cannot use this illness to assess your health, nor to refuse cover, exclude it or increase the premium. Article 61/3 allows the King to set shorter periods for certain types of cancer in a reference grid. Article 61/4 provides for a grid of chronic illnesses for which the insurer cannot impose a surcharge or an exclusion, or only to the extent justified by medical and actuarial criteria.

Wikifin confirms that this right exists, speaking of a period “often of five years” and a scope that also covers certain chronic illnesses. Ask your insurer for the information document that the law requires it to give you at the latest with the medical questionnaire (art. 61/1/1).

Refusal or surcharge: the Pricing Monitoring Office

If you have an increased health risk, the insurer can refuse or propose a surcharge. The law regulates this situation (art. 213 to 217):

• the insurer must separate the basic premium and the surcharge;
• it must give written reasons for a refusal, a postponement, an exclusion or a surcharge;
• it has fifteen days to decide between the application and its answer, under article 216;
• you can refer the matter to the Pricing Monitoring Office. Article 217 specifies that the candidate for insurance can refer the matter to it directly.

The Office examines whether the surcharge or refusal “is objectively and reasonably justified”. Its proposal is binding on the insurer concerned. It must be made within fifteen working days of receipt of the file. The insurance ombudsman service acts as its secretariat. Under article 219, an insurer that refuses or charges a surcharge must communicate the conditions set by the Office.

The Compensation Fund

The law (art. 220) provides for a Compensation Fund (Caisse de compensation) approved by the King. Its task is to spread the burden of surcharges. Insurers offering life insurance as security for a mortgage loan and mortgage lenders are jointly and severally liable to pay into it the sums needed. It also bears the costs of the Office.

The law also provides a safety net when the surcharge is very high: the insurer must then offer a standardised cover, for a loan linked to the sole and own home (habitation propre et unique) (insurance act of 4 April 2014, art. 222 and 224). The exact thresholds are in the consolidated text on Justel: ask the insurer or the Pricing Monitoring Office whether they apply to your file.

Tax deduction

There is no deduction specific to this insurance, according to the pages we read. The premium is taken into account only within a benefit linked to the loan:

• Wallonia: for a loan that still gives entitlement to the chèque habitat (housing voucher), the benefit is limited to the repayments of the year and the premium of the individual life insurance linked to the loan. Wallonia states that this chèque habitat is abolished for a home acquired or built from 2025.
• Brussels: the bonus-logement (housing bonus) has been abolished since 1 January 2017, but remains valid for loans taken out before that date.

For a recent loan, do not count on a reduction. See your borrowing capacity.

Which professionals to consult

• An insurance or credit broker, to compare insurers. See our guide on the mortgage credit broker.
• The insurance ombudsman service, in the event of a dispute with an insurer.