Is it necessary to take out life insurance when insuring a car? Do they have the right to oblige life insurance?



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• Legal grounds for refusal of insurance
• Is life insurance necessary for compulsory motor liability insurance?
• How to avoid paying for excess life insurance when taking out compulsory motor liability insurance?
• Features of issuing an electronic MTPL policy from 2020

Is it possible to purchase an MTPL policy without life insurance, as many insurers offer? And what should a motorist do if the insurer imposes life insurance under compulsory motor liability insurance, concluding a basic contract with a company that guarantees its liability to victims in the event of an insured event on the road? Sometimes the car owner is placed in such strict conditions that it is impossible to insure his car without drawing up an additional contract, and the main insurance costs about 2 thousand more.

What does insurance protect against and what does insurance provide?

Mortgage life insurance will provide financial compensation in the following situations:

• Temporary loss of ability to work. This clause is specified separately in the insurance contract. In this case, payments are provided for the period of the client’s incapacity for work in the full amount of insurance premiums or in part.
• Obtaining disability of I, II groups. In this case, the amounts of regular contributions are revised based on the nature of the disability, degree of ability to work, and the actual amount of income of the borrower. The difference between the final payment amount and the initial amount specified in the mortgage agreement is paid by the insurer.
• Death of the borrower. The entire remaining amount of debt is paid by the insurer in full, the mortgage debt is fully repaid, and the property becomes the property of the legal heirs.

Despite the utmost clarity and transparency of the insurance contract, many clients who are faced with the task of taking out a loan to purchase real estate for the first time refuse to purchase a policy. This is usually caused not by a lack of information about what such insurance protects against and what it provides, but by the desire to save money. After all, in addition to regular mortgage payments, you will also have to pay annual insurance.

Therefore, in response to the most frequent remark of such thrifty borrowers: (why do I need life insurance?), the following arguments can be given:

• The insurer will assume the obligation to repay the loan (in part or in full).
• Neither the bank nor third parties will claim the property, and the relatives of the responsible person will not be subject to an unbearable debt burden.
• And most importantly, you can count on a decrease in the interest rate on your mortgage loan. In other words, the bank reduces the amount of payments by an amount almost equal to the borrower's costs for insurance. The only thing to consider is that mortgage payments are usually made quarterly or monthly, and insurance premiums in most cases are paid once a year, so you should prepare the required amount in advance.

Return of the imposed service

Companies do not have the right to force a client to purchase services that he does not consider necessary.
They are warned about this by the law on the protection of consumer rights, Art. 16, part 2. The Central Bank of the Russian Federation obliged insurers to register in any voluntary insurance contracts; the decree is valid from March 2, 2016.

Within five days, you must contact the insurer with a written statement of your desire to terminate your life insurance. You can get a full refund if you terminate the voluntary insurance contract within 5 days.

The following details must be taken into account:

1. Submit an application during a personal visit to the company, and not by mail - to strictly adhere to deadlines.
2. Make sure that the secretary puts the company stamp and the date of acceptance of the application on the copy of the application. Then there will be confirmation that the letter has been received by the company.
3. Attach copies of documents confirming the transaction - policy, check.
4. Leave the owner’s full bank details and contact phone number.

If the contract does not indicate that the company is obliged to return the paid insurance premium upon termination, then, most likely, instead of money you will receive a refusal. It's worth a try, but before doing so, carefully study the terms of termination.

How is the insurance amount calculated?

The amount of insurance can be determined based on the full value of the property purchased with a mortgage, or the insurance contract can be concluded for the loan amount. In the second case, the policy covers 70-80 percent of the full price of the property, since mortgage schemes usually provide for a down payment of 20-30% of the appraised value. This is a general situation; the final price of insurance is also determined by many other factors:

• Borrower's gender. As practice shows, insurance cases happen to women less often, so the policy will cost them a little less.
• Profession. Some types of professional activities are accompanied by significant risks to life and health, so representatives of dangerous professions and people working in hazardous conditions will have to pay large amounts of insurance premiums.
• Extreme hobby. If the borrower is interested in hang gliding, parachuting, diving, or other activities associated with an increased risk of serious injury, this will also have an unfavorable effect on the amount of contributions.
• Age. The older a person is, the weaker his immunity is, and he is more susceptible to external adverse factors. This means that insurance will be more expensive for older people.
• Health status. In the process of concluding an insurance contract, the client is asked to provide reliable information about existing chronic diseases and indicate height and weight parameters. In case of severe illness or excessive deviation of height and weight indicators from the norm, indicating dystrophy or obesity, the policy will cost more. And if false data regarding health is revealed, the borrower may be denied insurance payments.

Most insurance companies offer health and life insurance in the amount of 0.5-1.5 percent of the total loan amount (or the estimated value of an apartment or other real estate purchased with a mortgage).

Why is additional insurance for anything not necessary?

Of course, every driver, even the most careful and careful, risks his life and health while on the road. But whether it is necessary to take out life insurance when insuring a car, only he can decide for himself. Since nowhere, in any legislative act, are these types of policies mentioned together, life insurance is absolutely not related to the operation of compulsory motor liability insurance. As the main law of the state states, a person has the right to manage his own health and life. Therefore, in this case, coercion is a direct violation of current legislation.

Why is this happening? This is primarily what unscrupulous insurers do. Taking advantage of the fact that many consumers do not always know their rights and are not ready to defend them, they strive to get as much illegal profit as possible. However, this phenomenon can and even must be combated.

How to get an insurance policy

Borrower insurance is carried out in two ways. A bilateral agreement can be concluded at any time: before taking out a mortgage loan and after. In the second case, the client can submit an application to the bank to revise the interest rate, thereby reducing the amount of regular payments in accordance with the amount of insurance premiums. However, this will oblige the borrower to renew the policy annually until the mortgage agreement is terminated and the property becomes his full property.

The tripartite agreement is concluded simultaneously with the loan registration. In this case, the stakeholders are the bank, the client and the insurance company. In this case, the borrower also gets the opportunity to pay premiums at a preferential rate and is obliged to extend the validity of the insurance contract for the entire loan period.

When taking out a life and health insurance policy, most insurers offer clients to choose the most convenient form of payment. A standard insurance contract usually provides for annual payments equal to the interest rate on the balance of the loan amount. However, the borrower can choose other options by paying equal installments quarterly or monthly.

On the Prosto Insure portal you can choose the most profitable life insurance for a mortgage among popular insurance companies. To do this, enter the necessary data for the calculation on the calculator page.

Appeal to Rospotrebnadzor: protection of consumer rights

In addition to court proceedings, you can contact Rospotrebnadzor regarding imposed services. Insurance services are the same product as other products consumed by citizens of the Russian Federation, therefore, companies in this area are also subject to the jurisdiction of Rospotrebnadzor. A consumer can file a complaint against an insurance company that refused to issue a compulsory motor liability insurance policy without life insurance for the car owner. In order to perform this action, on all pages of the contract, along with his signature, the owner must indicate that he was denied the registration of a compulsory motor liability insurance contract without a life insurance policy.

Documents required for mortgage life insurance

To obtain a policy, the client must submit the following documents:

• application in the form established by the insurance company;
• completed application form;
• a photocopy of the work book (all completed pages);
• state-issued civil passport;
• a loan agreement or a document certifying the estimated value of the property (apartment, part of it, house);
• at the request of the insurance company - a certificate from an official medical institution about the state of health.

Purchasing insurance without additional services

A citizen has the full right to purchase an OSAGO insurance policy without additional services, the list of which also includes life insurance. Moreover, there is a law number 2300, article 16 of which directly prohibits the sale of one product only subject to the additional purchase of another. This statement fully applies to services, one of which is insurance.

Accordingly, insurers cannot impose this product. And refusal to sell a policy due to the driver’s unwillingness to pay extra money is illegal.

The first thing a citizen must do to buy OSAGO without life insurance is to carefully re-read the contract and listen carefully to the consultant.

It would be a good idea to come to the insurer’s office not alone, but with witnesses. If a citizen has recording devices, you can use them.

You can also immediately submit a written application (in person or by registered mail). A response should be received within 20 days. Receiving a refusal is grounds for filing a claim, which must be responded to within thirty days. If after this the application is refused, you can contact the departments for control over the activities of insurers.

Peculiarities! Once an application has been accepted for processing, the likelihood of refusal due to lack of life insurance is minimal.

But the best way to protect your rights is to familiarize yourself with the current legislation. In most cases, insurance company employees try to impose additional services on those citizens who do not understand the regulations. The more knowledge a vehicle owner has, the less likely it is that he will have to overpay.

Procedure for insurance payments

When concluding a tripartite agreement, all financial issues in the event of an insured event are resolved practically without the participation of the client, between the insurer and the bank. The borrower is only required to promptly notify the parties to the agreement and, if necessary, provide documentary evidence.

If the policy was obtained without the participation of the bank, then the client or his heirs independently draw up insurance payments, which are transferred to the bank to pay off the debt on the mortgage loan.

Why get life insurance on a car loan?

Insurance companies and banks have provided stable confidence that purchasing a car on credit is only possible if the buyer has life insurance. Yes, it is really logical and thus very well insures the car owner’s relatives against unplanned payments. But it cannot be said that this type of insurance is mandatory.

Life insurance is a logical solution when buying a car on credit. The insurance amount will be a very good help if the owner receives injuries that will take several months to heal. But if, God forbid, the injuries are fatal, the insured amount will help the owner’s family repay the loan or pay for car repairs. After all, after a person’s death, his heirs inherit not only real estate and funds, but also the debts of the deceased. Therefore, it is absolutely not worth asserting that life insurance when purchasing a car on credit will not bring any benefit at all. This is a certain protection, however, it is not mandatory.

Recalculation in case of partial or full early repayment

The insurance contract is usually concluded for the entire term of the mortgage loan and provides for fixed amounts of payments, the amount of which can be reduced annually. If the borrower repays part of the loan ahead of schedule, he should contact the insurer about concluding an additional agreement. After the client provides documents from the bank certifying the remaining amount of debt, the amount of insurance payments for the remaining period will be recalculated. And if the long-term loan is fully repaid, the borrower can contact the insurance company with an application for the return of part of the amount of insurance premiums.

Another bonus that a client who insures his life and health receives is the opportunity to apply for a tax deduction (13 percent of personal income tax paid on wages).

Amendments to car insurance legislation

Back in 2014, the “motor citizen” underwent a number of changes in provisions. These provisions do not say anything about the fact that life insurance and compulsory motor liability insurance must go in parallel and be purchased jointly.

When asked whether it is possible to insure without excluding additional services, unscrupulous organizations answer categorically, since they do not want to lose profit due to innovations. Innovations in legislation applicable to compulsory motor liability insurance consisted of changes in the amount of compensation and fines.

• OSAGO insurance additionally includes services to protect life and health, but the insurance company is subject to sanctions in the form of a fine. The amount of the fine does not exceed 50,000 rubles;
• The amount of payments under the Europrotocol has been increased. This document is filled out without the participation of the traffic police, by mutual agreement of the drivers. Compensations for victims have also been increased to 500 thousand rubles;
• A car owner can insure a car under compulsory motor liability insurance in any chosen insurance company, but after a car accident, a claim in order to receive compensation should be submitted to your company, and not to the initiator of the accident.

Why are life insurance not compulsory?

Not many Russians know their rights, especially with regard to compulsory and voluntary insurance. Since in the case of a car, insurance is mandatory, which means you cannot escape from it by law. But in the case of voluntary protection of life and health, the policyholder has the right to think and refuse.

The law “On Compulsory Motor Liability Insurance” does not provide for any terms of the contract that infringe on consumer rights. The type of driver liability protection is provided in a single copy and covers only the risks associated with liability on highways.

Every Russian has the right to choose for himself whether to defend life or not. Since this option of protection is voluntary, its imposition makes the agreement unclaimed.

But many insurance companies prefer to add life protection to compulsory motor liability insurance, trying to earn as much as possible. When a driver is forced into insurance, we will consider what to do next.

Why do insurance companies sell life insurance?

Refusal to provide forms for the protection of motor third party liability OSAGO is unauthorized. But greedy insurance organizations, despite the laws, are trying to stay profitable.

The driver has the right to refuse life insurance when applying for compulsory motor liability insurance, but insurance companies are free to insist and simply not sell the form. The answer to the question of why companies do this is the amended provisions in the law on “automobile citizenship”.

That is, the funds allocated for treatment that victims may need have been increased. This means that insurance companies have to pay more to the victim than before. The unprofitability of this type of protection is possible and forces the insurance company to take action and impose more profitable insurance.

What programs are there?

Life insurance rules provide protection under one or more of the following programs:

• mixed;
• lifelong;
• deadline;
• in case of survival and death;
• credit life insurance;
• according to the program on time.

Additionally, life insurance includes:

• from accidents;
• investment insurance;
• regarding the protection of insurance premiums;
• regarding exemption from payment of insurance premiums.

The minimum validity period for any of these programs is 1 year.

Advantages and disadvantages

The benefits of life insurance include the following:

1. Immutability of the terms of the contract. Tariffs and risks always remain the same throughout the entire term of the contract, regardless of even illnesses revealed during the payment process.
2. Guaranteed annual profitability. Additionally, investment income is accrued, which directly depends on the insurer’s performance. Moreover, interest is accrued not on the entire contribution amount, but only on its part, which forms the reserve.
3. Convenience . By concluding just one contract, protection against unforeseen events is provided, plus funds are saved and accumulated. At the same time, there are no additional time costs for searching for two counterparties.
4. Special status. When a beneficiary is mentioned in the contract, the death of the insured guarantees payments to the first and is not included in the inheritance.

There are also negative points:

1. Long term . In an unstable economy, contributions are subject to inevitable inflation.
2. No guarantee of refund of contributions in case of revocation of the insurance company's license.
3. Low profitability. Even without taking into account tax deductions, investment income is not quite large compared to other investment instruments.

What does the policy provide?

Life insurance is needed for the following:

• financial security of the whole family;
• protection from deadly diseases;
• a guarantee of financial support in the event of an unexpected death of the insured for close relatives;
• protection of accumulated assets;
• preferential taxation of invested capital due to their exemption from duties at the time of action;
• creating and increasing an inheritance by paying out funds in amounts much higher than those invested during the life of the insured.

Supervisory authorities

There are several departments involved in monitoring the activities of insurers. If problems arise, a citizen can file a complaint with:

• Central bank;
• "Union of Auto Insurers";
• "FAS";
• "Rospotrebnadzor";
• court.

If the insurer's guilt is proven, penalties will be applied to it (up to and including revocation of the license). By going to court, the client can not only restore justice and protect his rights, but also receive financial compensation.

Compensation for illegal actions of the insurance company

Going to court is a last resort.
This method of influencing the insurer is used if other methods have not yielded results or the client wants to recover additional compensation from the insurance company. In court you can obtain payments for:

1. Infliction of moral damage. In this case, the emphasis will be on the impossibility of using your own vehicle due to unlawful actions of the insurer.
2. Material costs incurred. Since you cannot use a car without a policy, the claim can include a demand for the return of funds spent on public transport or a taxi.
3. Lost earnings. If an insurance company's client uses his facility to make a profit, he can recover it from the insurer. The basis for this is the illegal actions of the Investigative Committee, due to which he was temporarily suspended from activities.

To file a claim, you must draw up a statement of claim. A citizen will need to have evidence that will allow him to argue his position.

The claim is filed after submitting the claim to the head of the insurance company. The time for consideration of the case does not exceed three months. In most cases, the judge sides with the plaintiff.

List of insurance companies that insure without life insurance

You can apply for compulsory motor liability insurance without life insurance in:

• SOGAZ;
• Alfa insurance;
• MAX;
• Agreement;
• Tinkoff.

The listed financial organizations have long proven not only their integrity, but also their solvency.

And then look at how Rosgosstrakh is imposing life insurance under compulsory motor liability insurance.

To summarize, it can be noted that a car owner is not required to simultaneously purchase compulsory motor liability insurance and life insurance. If a client is denied a service, it is necessary to complain to higher authorities or contact the office in advance, at least 30 days in advance, with a full package of documents. You can also buy an MTPL policy without add-ons remotely.