Do I need life insurance when I buy a property in France ?

THIS is a common question posed by our clients when they come to see us here in the Dordogne.

French law requires that all real estate loans in France be insured so that the lender is paid in full in the event of the borrower's death. While it is possible that an existing life insurance policy could be assigned to the bank and offered as proof of insurance, typically the bank will impose its own policy at fixed rates as a requirement of granting the mortgage.

The insurance premium is incorporated into the monthly principal and interest payment. As French law requires that the borrower have life insurance on the loan so that the lender is paid in case of the borrower's death, older buyers may have to meet certain medical requirements and may have slightly higher payments.

The medical requirements may include a physical exam and certain blood tests, which may be certified by a physician in the borrower's home country.

Once the buyer has decided to proceed, Premier French Property can:

• Suggest a highly qualified French Notaire who is experienced in transactions involving property acquisitions by non-French citizens. The Notaire will advise the buyer on decisions to be made regarding how the property is titled, and the ramifications of French inheritance law.
• Assist the buyer in transferring to the Notaire the 10 percent deposit necessary to secure the property and authorize preparation of a compromis de vente.
• The Notaire will explain to the buyer any unique aspects of the compromis such as easements, water rights, etc.
• Discuss the compromis de vente with the buyer and Notaire and recommend any necessary changes prior to signing.
• After signing and expiration of the seven-day cooling-off period, arrange for a final settlement date.

How do I go about insuring the property?

Any owner should of course insure a property against fire and catastrophic loss. Mortgage lenders will require proof of such insurance before issuing a loan commitment.

Premier French Property can recommend to its clients a reliable English-speaking insurance broker experienced in dealing with overseas buyers.