Solde restant dû (mortgage life insurance)
Assurance solde restant dû is the Belgian name for mortgage life insurance: it repays the lender the outstanding capital of a mortgage if the borrower dies. It is not legally compulsory in Belgium, but lenders require it in practice in almost every file. You will meet the term on every loan offer.
An underestimated cost
The premium depends on age, health and smoker status. Over a long loan it represents a considerable sum, sometimes tens of thousands of euros in total, which is rarely visible when comparing interest rates.
The essential point: you are not obliged to buy it from your lender. You may take it out with any insurer, and the spread of premiums between insurers is often wider than the spread of rates between banks.
Some lenders offer a rate reduction conditional on taking their own policy. The comparison then has to be made on both elements together, because a lower rate does not always offset a higher premium.
Frequently asked questions
Can I buy it somewhere other than my lender?
Yes, you are free to choose the insurer. The lender may require cover with certain characteristics, such as amount, duration and beneficiary, but cannot impose its own contract on you as a condition of the loan.
What cover should a couple choose?
Options range from full cover on each life to a split reflecting each partner's share of income. The choice depends on whether the survivor could carry the monthly payment alone, so it is a trade-off between premium and real security.