Loan Life Insurance in Morocco
What is a Loan Life Insurance?
Loan Life Insurance is an insurance contract that guarantees the repayment of the outstanding capital of a loan in the event of the death or absolute and definitive disability of the policyholder. This ensures financial protection for both the borrower’s family and the lending institution.
How Does it Work?
In the event of the death or absolute and definitive disability of the policyholder, the insurer directly repays the financial institution the remaining loan balance, subject to the policy’s terms and exclusions.
Key Aspects of Coverage
- Outstanding loan repayment : The insured capital covers the unpaid portion of the loan.
- Mortgage protection : Ensures property ownership remains with the policyholder’s family.
- Disability coverage : Covers the loan in case of absolute and definitive disability.
- Exclusions : Certain risks may be excluded as per the insurance contract.
Calculation of the Outstanding Capital
The remaining loan balance is determined based on the loan amortization schedule provided by the bank or financial institution. The insured amount is assessed as follows:
- In case of death : The loan balance on the date of passing is covered.
- In case of disability : The coverage is activated upon official medical confirmation by the attending physician or a specialized expert.
If stipulated in the insurance contract, penalties and interest due to late repayment may be included in the outstanding capital calculation.
To activate the coverage, the insurer must receive the claim notification along with the required supporting documents within the timeframe stated in the contract.
Types of Loan Life Insurance
Loan Life Insurance is a personal insurance policy that can be subscribed to :
- Individually – by policyholders securing their personal loan.
- As a group policy – offered by lenders to multiple policyholders under collective coverage.
This insurance is often mandatory for mortgage loans and strongly recommended for other types of loans in Morocco, providing financial security for policyholders and financial institutions alike.
Who is Concerned ?
This insurance is intended for anyone seeking to take out a loan with a financial institution, particularly a mortgage loan. It provides financial security to both borrowers and insurers by guaranteeing repayment in case of unforeseen circumstances
Rights and Obligations of the policyholder
We invite you to refer to the "Insurance Guide" published on the ACAPS portal.
What does the Authority do ?
Within the framework of the powers vested in it by Law No. 64-12 establishing the Insurance and Social Security Supervisory Authority (ACAPS), the latter institution ensures that any and all insurance products offered to consumers are understandable, balanced, useful and that they comply with the regulations in force.
It also shall monitor the reliability of the information provided to policyholders and ensure the fair treatment of policyholders by Insurers.
Legal/Judicial Remedies in Case of Dispute with Your Insurer
Under Article 7 of Law No. 64-12, ACAPS is authorized to investigate complaints from policyholders regarding insurance companies and intermediaries (brokers). However, it is recommended to first contact the broker or insurer concerned. If the dispute persists, the policyholder may submit a complaint to ACAPS through the available channels. The Authority will then examine the case and take appropriate action in accordance with the applicable legal and regulatory provisions.
