Today, most people, due to a lack of funds, purchase goods on credit. These are not only telephones and household appliances, but also housing, cars, travel packages and jewelry. From the banking sector, of course, there are more and more lending programs.
But the bank not only issues a loan, but also imposes “necessary” insurance on it, obliging you to fork out a certain amount. Do you need this very service? Is it possible to refuse it or is it possible to return the insurance after repaying the loan and how to return the money paid? This will be discussed further.
Opinion of the law on the return of loan insurance
It is the law that regulates all relationships between the bank and the direct client.
How long does it take to get the loan insurance back?
On November 20, 2015, the Central Bank of Russia issued decree N3854-U, in which, in brief, the bank obliged insurance companies to provide for the right to refuse voluntary insurance within 5 working days from the moment the parties signed the contract. The period was increased to 14 days from 2018. This decree also applies to the insurance that the bank tries to impose when applying for a loan. To prepare for such innovations, the Central Bank gave all insurers time to prepare until April 4, 2016; it was from this date that the decree came into full force.
Please note that you have the right to terminate the insurance contract within 5 working days from the date of signing, i.e. when the loan is taken out, regardless of the day of payment. For example, if you went to pay on the 3rd working day, that means you have 2 working days left to cancel.
Representatives of insurance companies, in turn, were legally obliged to pay in such cases the policy amount in 100%, minus the days of use of the service, as well as within a 10-day period. If you submitted an application form for termination of the contract on the fourth day, then the insurer undertakes to return the amount, calculating % for 4 days of use, no later than 10 working days. Knowing the law on the return of loan insurance, and most importantly, being guided by it, no insurer will be able to mislead you when applying for a banking product.
But what to do if an insurance policy is signed and how to get the money back? We will talk about this further.
Imposing insurance and controversy
If, when issuing a loan, you were assured that insurance is a mandatory part of the loan agreement, this means one thing: gross violations of the rules “On the Protection of Consumer Rights” were committed during registration. This is also a violation of Art. 11 “On protection of competition”.
In such cases of registration, the contract has a clause according to which you are obliged to pay a certain fee for joining the “insurance program”, including compensation to the banking structure for expenses incurred and payment of insurance premiums to the guarantor. Such a maneuver by the bank contradicts Art. 927, 421, 422 of the Civil Code of the Russian Federation.
If you go to court, the bank will have to pay 100% of the full amount of insurance imposed on you.
Return instructions in 2019
Many, when applying for a loan, for example, a long-awaited 40-inch plasma TV, being so close to realizing their life’s dreams, do not read the documents offered by the bank manager very carefully and, of course, fall for the insurance bait. The majority of bank employees begin to assure that without this policy they will refuse to issue a loan and you, of course, without knowing the law, agree for the sake of the desired product.
When you wake up a few days later, you realize that you don’t want to pay the extra money and want to return the money, but what to do and what to do, because you’ve already paid. The main thing is that the money can and should be returned!
In this case, within the regulated 5 working days from the day of signing the contract, you need to come to the main branch in the city and submit some documents to the manager:
- Application for waiver of loan insurance, filled out at the branch according to the sample;
- A copy of the signed policy agreement;
- A copy of the applicant's passport;
- Receipt or check for payment of loan insurance.
When filling out the application form, you must provide the following information:
- Passport details.
- Complete and accurate contract information.
- Reason for termination. It can be anything, even banality: “I’m not interested in insurance,” or simply refer to the law.
- Signature and date.
Insurers must provide a sample application; if not available, you can write it in free form.
Sample application
Sample application to Sberbank
Sample application (claim) for refusal of insurance
If there is no branch of the lender's bank in your city, then you should send documents for the return of loan insurance by mail, in the form of a registered letter. If you are going to use the latter, then do not forget to make an inventory of the documents being sent. Also, when submitting an application in person at the department, you should make a certified note on your copy of the refusal that it has been accepted.
After receiving the documents, the insurance company is obliged to pay the amount within the 10-day period established by law. In practice, they try to delay compensation until the last minute, but it is still paid in full. In case of violation of the terms of payment of the required payment, you can first call the hotline, informing that a claim will be sent to the bank on your part. As is observed in such cases, the money comes within 24 hours.
Is it possible to return the insurance after repaying the loan?
Having read the above information, many people have a question: “Is it possible to return insurance on a loan that has already been closed?”
This is practiced only if the loan is closed and the insurance contract is still valid. Although the procedure is not easy, it is still possible, by adhering to some rules, to return some of the money.
It is not uncommon for a loan to be repaid prematurely in order to save money on interest payments. But in such cases, the bank is silent about the possibility of paying insurance back for unused contract periods.
Refund of insurance upon early repayment of loan
If you nevertheless closed the loan ahead of schedule and are thinking: “How to collect the unused insurance amount?” follows:
- Contact the insurance company with an application for the return of part of the amount with justification, for example, they were able to repay the loan ahead of schedule. In this case, the insurer is obliged to recalculate the total amount of payment for the policy and return the unused difference;
- Terminate the contract and, starting from the next day, no longer pay insurance premiums.
If you were not aware of whether it is possible to refuse insurance on a loan after receiving it, then there is a chance to return at least part of the money after its closure.
For which types of loans can insurance be returned in 2019, and for which not?
The bank, represented by a competent manager, certainly takes a risk when issuing a loan. Imposing insurance on a client is like a guarantee of payment of an accepted order. After all, if we are talking about large bank investments, then insurance is definitely needed, because it is well-reasoned. Let's look at which products you can get a refund of loan insurance for:
- Cash loans;
- Credit cards;
- For consumer lending.
The policy of such products is voluntary and mainly insures the client who received the loan:
- Borrower's life;
- Cases of loss of main job, including layoffs;
- Financial risk protection;
- Property insurance, etc.
“Voluntary” insurance policies, when issuing the listed loans, are disguised as “mandatory” in the example. This of course violates the law. The client can refuse insurance, which will not affect the financial decision in any way. institutions for issuing a loan. You can also refuse insurance after receiving a loan.
There are also banking products for which an insurance policy is truly mandatory and if you refuse to purchase it, the bank has every right to refuse to issue the product, namely:
- Casco – for car loans, the purchased movable property is necessarily insured and remains documented as collateral with the bank;
- Mortgage - just like the previous loan, this product requires insurance and collateral.
When issuing this type of product, the bank does not violate anything, and if refused, has the right to refuse issuance.
Do you need the help of a lawyer?
When you signed the loan agreement, you did not read it carefully and now you are wondering: “Is it possible to refuse insurance on the loan after receiving it?” This is a fairly common phenomenon, and yet there is always a way out.
If 5 business days have not yet elapsed from the date of signing, then you do not need the help of a lawyer. Also, after the expiration of the period, you can contact the financial institution with a claim for the return of loan insurance. Many banks are expanding their “customer loyalty program” and can make concessions by issuing a waiver of insurance after receiving a loan, even up to 30 business days from the date of insurance. But of course, not everyone values their “breadwinners” so much and they definitely refuse their claims.
In such cases, you need to consult with a lawyer and prepare documents for the court, of course, if this is appropriate.
Undoubtedly, the Central Bank of Russia has provided great assistance to borrowers in resolving the question: “how to refuse loan insurance after receiving a loan?” Now all the trump cards are in your hands. The main thing to remember is that insurance is not required and any document should be carefully studied before signing, so as not to knock down office thresholds later, dealing with paperwork.
On June 1, 2016, there was good news for bank clients. The Bank of Russia has clarified the procedure for returning insurance.
The Consumer Protection Law has protected citizens in the past. You cannot make the purchase of some services a condition for the purchase of other services. In other words, you cannot stipulate that the loan will be issued only when the borrower pays for the insurance.
The Central Bank (CB) has made life easier for debtors. Like it or not, you will have to return the insurance from June 1, 2016 if the client terminates the contract. This conclusion follows from the instructions of the Bank of Russia, adopted on November 20, 2015, number 3854-U. If you can’t get your money back, write a pre-trial claim to the insurance company.
How to proceed to make an insurance return?
- Have you decided to cancel the contract? Keep track of deadlines. If you manage to complete the application within five days and write a refusal, you will receive a nice bonus. It is unlikely that an insured event will occur during this time. If there are no reasons for the insured event, then the insurance must be returned.
- Will you think longer about whether or not to cancel the contract? Another amount awaits you. All insurance money will not be returned. The amount depends on how long the contract was in effect.
Unfortunately, the changes will not affect old contracts. However, this does not mean that illegal terms of the contract cannot be challenged.
Advice. Read the agreement with the bank carefully. Please note that the contract includes a provision for the return of insurance if you cancel the contract. The main thing is that the insurance contract is drawn up correctly.
The following instructions will help you conduct a dialogue with the bank:
Fill out an application to the bank. Indicate how it is convenient for you to receive the money back: to a bank card or in cash.
- Submit an application to the bank. Please ensure that your copy is stamped with receipt or send a registered letter with acknowledgment.
- Wait ten days for insurance money.
If you do not receive a positive response about the return, complain to the Central Bank or the court. Let us immediately warn you that the document does not cover all types of insurance. Pleasant changes will affect clients who have insured their lives, health, and purchased insurance against financial risks.
5 cases in which insurance cannot be returned:
- with pension insurance;
- insurance when traveling abroad;
- insurance in agriculture;
- insurance for admission to professional activities;
- insurance against the risks of non-fulfillment of obligations under contracts.
Are you faced with the fact that the bank included a condition in the contract under which the insurance is not refundable? Go to court. You can count on compensation for moral damages, payment of legal costs, and return of interest for the illegal use of your funds. Also, payment of a fine in your favor for the fact that your demands were not voluntarily satisfied.
Here is a practical example
Appeal ruling of the Kemerovo Regional Court dated March 29, 2016, case No. 33-3723/2016. The insurance company had to pay for refusing to return the insurance premium.
Arguments of the court:
- The plaintiff's car was stolen. Thanks to the insurance compensation, the plaintiff repaid the loan debt.
- According to Article 958 of the Civil Code, the plaintiff has the right to return the insurance premium for the duration of the insurance contract. Theft of a car means that an insured event has occurred.
- Meanwhile, the insurer refused to fulfill its obligations. The plaintiff's money was kept illegally.
Conclusion : the insurance company must pay interest for the illegal use of other people's money, pay a fine since the claims were not voluntarily satisfied, and compensate for moral damages.
The crux of the matter. The plaintiff signed the loan agreement and found himself in a real debt hole. The contract does not include provisions for additional payments or insurance payments. When signing the contract, the plaintiff was not given information about the payments he would have to make, hidden payments, or the need to pay for insurance. In addition, the plaintiff was charged additional fees for servicing at the bank.
After repaying the loan, the borrower applied for a refund of the insurance premium, but was refused.
Court findings
Bank employees violated the Code of Administrative Offenses:
- the borrower was provided with false information regarding the loan;
- forced to pay for additional services, the full amount of the loan was not specified;
- imposed life and health insurance.
The insurance premium was written off twice in favor of different insurance companies. They imposed additional fees on the borrower.
Consent for insurance was automatically entered into the borrower's application form using a computer. The plaintiff did not have the opportunity to refuse insurance and independently check the “NO” box in the insurance section.
Conclusion: The defendant violated the requirements of the law and must be held liable in the form of a fine of two hundred thousand rubles.
Given that all banks are actively imposing loan insurance on their borrowers, information on how to correctly refuse insurance after receiving a loan, how to return insurance if it has already been imposed, and how to return insurance in case of early repayment becomes no less important for Sberbank clients loan.
All about this in this article.
Loan insurance is an insurance product, exactly the same as compulsory motor liability insurance or property damage insurance, aimed at insuring the life and liability of the borrower to the lender (bank).
In accordance with this, if the insured borrower lost his job or disability, or life, the insurance company will be liable for his obligations to the bank.
Naturally, the cost of insurance increases in proportion to the increase in the loan amount. The insurance and banking systems as a whole are designed in such a way that none of them will remain at a loss, even if all insured borrowers become incapacitated.
What can you insure your loan against?
- getting disability
- serious illness
- job loss
- deterioration in financial condition
- death of the borrower
If you take out a consumer loan of any type (including a car loan), you will only insure your life and liability. If you take out any other secured loan, then you will insure not only your life, but also the pledged property against damage.
ATTENTION! Based on the Civil Code of the Russian Federation, consumer credit insurance is not mandatory and is carried out at the request of the borrower. And here Collateral insurance is essential, if you intend to take out a mortgage, but in this case, you also may not insure your liability.
Why do you need to insure your loan?
It is clear that every bank is trying to protect itself as much as possible from non-payment of loans. Especially when we are talking about Russia, where debt discipline is at a very low level, and therefore banks sell insurance of all types and other additional services to all clients. But the situation is even more cunning!
All large Russian banks themselves open their own insurance companies, which automatically become part of their holdings. And why?
The insurance business is also a very profitable business. Thus, the bank takes two skins from one client– both loan interest for the use of other people’s money and the amount of insurance for a service that is dubious from the point of view of usefulness.
Is credit insurance beneficial for the borrower?
No, it’s not profitable - the full cost of the loan immediately increases by the cost of insurance, otherwise its usefulness is in question.
ATTENTION! Banks spread myths that credit insurance is cool and convenient! If you lose your job or become disabled, the insurance company will immediately cover your debt, and if you die, the debt will also be closed and not . But, firstly, no one will sit without work for a long time (after all, you need to eat something), secondly, no one specifically wants to get disabled and this happens very rarely (especially at a young age), and thirdly, in In the event of your death, your heirs may not enter into the right of inheritance. So why and who needs credit insurance anyway?
Loan insurance at Sberbank can be divided into the following types:
- from receiving 1st, 2nd and other disability groups
- from job loss
- from the death of the borrower
- property damage insurance
Cost of insurance, terms
Perhaps the most important question, besides the question of how to return insurance on a Sberbank loan, is the question, how much does all this happiness cost and for how long is the insurance issued?
The term of the insurance policy is absolutely identical to the term of the loan agreement, that is, if the loan term is 3 years, then the insurance policy is issued for 3 years.
Sberbank has both its own insurance company ( Sberbank Insurance), as well as 30 other insurance partner companies. You can obtain a complete list of companies directly from Sberbank.
All insurance companies have completely different tariffs and interest rates, but we will focus on the Sberbank Insurance company, since it is the company that Sberbank will impose on you in the first place. You must take into account that you have the right to choose any other insurance company you like, with which Sber does not even cooperate.
Cost of insurance:
- accident insurance from 0.30 to 1% of the loan cost per year + many paid add-ons to the base rate
- life insurance from 0.30 to 4% of the loan cost per year + paid additions to the base rate
- cancer insurance from 0.10 to 1.7% + paid extras
- collateral insurance from 0.70% per year of the loan amount + paid additions to the base rate
Accordingly, the amount of insurance directly depends on the interest rate for the service and the size of the loan. The larger the loan amount, the more expensive the insurance will cost you.
Requirements
Sber does not and cannot have any requirements for the borrower who wants to take out insurance for a loan from Sberbank. Well, what can you demand from the borrower in such a matter?!
But the bank has many requirements for a third-party insurance company (this is in case you do not want to use the services of Sberbank Insurance or any other of the 30 partner companies).
Well, that's understandable! Who wants to give a client (his money) to a company with which you do not have a mutually beneficial relationship (you give me - I give you).
A short example of requirements for a third-party insurance company:
- 3 years of experience in the insurance market
- compliance with the norms and laws of the Russian Federation
- availability of a state license
- the company has no debts to the budget
- absence of lawsuits against the insurance company, which entail a decrease in equity capital by 10% or more
- and so on
TO SUM UP! If Sberbank imposes insurance on you, and you don’t know what to do, then just refuse to formalize it, referring to Article 958 of the Civil Code of the Russian Federation . If this does happen, then you can easily start suing Sberbank, if, however, you have the time, energy and money for this. And if you refused credit insurance and Sberbank refused to issue you a loan in retaliation,.
then in this case you will not be able to force the bank to approve a loan for you
How to get money back for insurance
Question: Do they refund money for loan insurance at Sberbank?
Answer: they refund if no more than 30 days have passed since the loan was issued; if more than 30 days have passed, but the policy has not expired, then only 50% of the cost can be returned, and the money for insurance can also be returned in case of full or partial early repayment of the loan (which does not affect the provisions on the return of the cost of insurance).
And now about how to return insurance on a Sberbank loan. ATTENTION! There is a misconception among people that the return of insurance is possible only with early repayment of the loan from Sberbank, since the need for it has disappeared, and part of the money can be returned. It's a delusion! Insurance can be returned at any stage of the loan agreement and insurance policy
. The only question is how much money you can get.
- How to return insurance: take a piece of paper and write an application for the return of insurance on a Sberbank loan in duplicate
- in the name of the insurance company that provides you with the service
- submit the application and documents directly to the insurance office, and if you are served by Sberbank Insurance, you can also do this through a Sberbank branch
- make sure the employee marks your application form
- and wait for some movement from the insurance company
- if your application is not accepted, they tell tales that they cannot do something, then start complaining to all authorities (start with the head of the Sberbank branch or with the director of the insurance company, then there is Rospotrebnadzor, Procurator and Central Bank of the Russian Federation)
- if your application was accepted, but they still don’t want to return the money, then again start complaining to all departments
Waiver of insurance after receiving a loan
You have the full and legal right to express your refusal of insurance after receiving a loan from Sberbank, and if everything is done in accordance with the law, then no one will be able to “take away” the loan issued from you, and even no one at the bank will look askance at you.
It's simply a matter of returning a product that doesn't fit, just like with clothes.
As written above, the Civil Code of the Russian Federation No. 958 gives you the right to refuse insurance after receiving a loan, as in any other bank in the country, within 30 days after receiving the loan, if more than 30 days have passed, then you have the right to return 50% of the cost of insurance, and if the insurance policy has expired, then there is no subject left for discussion.
ON A NOTE! It turns out to be an interesting situation. Sberbank imposes insurance and without it can easily refuse a client, but with it the loan approval process is smoother. By doing so, you can agree to purchase the insurance and pay for it, and then you can cancel the insurance after receiving the credit within 30 days and get your money back. Thus, you ensured that the loan was approved and issued, and you did not spend money on insurance.
Refund of insurance upon early repayment of loan
Insurance returns are much more likely to be relevant compared to other cases of insurance returns (read the article -). This is understandable - you have repaid the loan ahead of schedule, you no longer need an insurance policy, and there may be another 12 months until the end of its validity. Of course, I would like to get my money back for a service that is no longer needed.
On November 17, 2009, the Presidium of the now liquidated Supreme Arbitration Court adopted an important resolution that recognized commissions on bank loans as infringing on the rights of consumers. In the years following this decision, Russian courts have heard perhaps millions of cases involving the return of illegal bank commissions to consumers. Gradually, most banks were forced to abolish commissions on loans. Commissions were a great source of income for banks. Perhaps this is why they had to find an alternative to commissions. So banks began to impose credit insurance...
How is loan insurance imposed?
- “I took out a consumer loan. When applying, the loan officer told me that they wouldn’t give me a loan if I didn’t get insurance.”
- “I got a loan. At home, my wife and I read the contract: it turned out that they had sold me the insurance. Loan 100 thousand, insurance 30 thousand.”
- “I took out a loan for 5 years. I paid it off early in 2 years. I came to the bank to get my insurance money back. It turned out that the insurance is not refundable.”
That is, consumer complaints are mainly caused by the following points:
- insurance was imposed / forced to take out, intimidating with a refusal to issue a loan / they were not warned about it at all;
- insurance is very expensive;
- According to the terms of the contract, insurance is not refundable.
Why is credit insurance imposed?
- because the vast majority of borrowers do not read the loan agreement before signing;
- because borrowers in most cases are not aware of the possibility of obtaining a loan without insurance;
- because sometimes borrowers are misled (in our practice, there have been cases when a borrower read a draft agreement where there was no insurance, but insurance appeared already at the signing stage);
- because borrowers are intimidated by loan refusal;
- because it is profitable for the bank to sell the borrower an additional insurance service and receive a percentage from the partner insurance company for it;
- because the insurance ensures that the loan is repaid to the bank in case of unforeseen circumstances (death of the borrower, disability, loss of job).
Simple rule:
If you cannot refuse insurance at the stage of obtaining a loan, you need to take out insurance on acceptable terms. Be sure to read all insurance documents before signing anything. The documents must include the possibility of early cancellation of insurance with a refund (cooling off period). If there is no such option or the terms of termination of the contract are unfavorable, find out about the possibility of obtaining another insurance with a more favorable termination.
In the summer of 2014, a separate law “On Consumer Credit (Loan)” came into force, which in theory was supposed to resolve the issue of credit insurance once and for all. However, as our practice has shown, it was not difficult for banks to comply with the requirements of the new law and successfully continue to impose insurance.
When may loan insurance be mandatory?
- For mortgage loans— the obligation to insure a mortgaged apartment may be provided for in an agreement with the bank, Article 31 of the Federal Law “On Mortgage (Pledge of Real Estate).”
- For loans secured by property (for example, car loans)- when the property remains with the borrower, he is obliged to insure it against from the risks of loss and damage, unless otherwise provided by law or contract, Article 343 of the Civil Code of the Russian Federation and Part 10 of Article 7 of the Federal Law “On Consumer Credit (Loan)”.
- When applying for any consumer loans— the bank may require you to insure “other insurable interest,” that is, life, health, etc., in order to ensure the fulfillment of obligations under the contract, Part 10, Article 7 of the Federal Law “On Consumer Credit (Loan).”
That is in fact, now for any consumer loan the bank can include an insurance clause in the contract. This is why it is so important to read the contract before signing.
The Federal Law “On Consumer Credit” also has a new rule: if the bank requires you to take out insurance, but by law such insurance is not mandatory (for example, in the case of life insurance), then the bank is obliged to offer you an alternative. That is, either issue a loan on the proposed terms with insurance, or issue a loan without insurance, but on comparable conditions.
Attention!
In all cases, the borrower must have the opportunity to choose the insurance company. A bank cannot oblige its clients to insure themselves with only one specific company. But he can set criteria for choosing an insurance company. The procedure for establishing these criteria is regulated by law.
What types of credit insurance are there?
Most often, borrowers are provided with life and health insurance in case of death or disability. Insurance in case of job loss is also quite common. For mortgage and car loans, of course, they offer insurance for the apartment itself and CASCO insurance. But we also came across quite exotic options: tick bite insurance, GAP insurance (guarantee of maintaining the value of the vehicle), apartment insurance for non-mortgage loans. Banks successfully imposed all this on people.
An absolute record in our practice was a car loan from Credit Europe Bank, for which the borrower was surprised to discover that he had 5 insurance policies issued by different insurance companies.
How is credit insurance obtained?
- By issuing an insurance contract or policy to the borrower, as well as insurance rules. In this case, the borrower himself is the policyholder and the contract is concluded directly between him and the insurance company, the insurance fee is transferred directly to the insurance company.
- By including the borrower into the bank’s existing group insurance program. In this case, the borrower is considered the insured person, and the insurance contract itself is concluded between the bank and the insurance company. The borrower is given an application for participation in the insurance program and a memo from the insured. The bank takes a commission from the borrower for connecting to the insurance program.
Fact:
The fee for joining the insurance program may significantly exceed the cost of the insurance itself. For example, for one loan from Eastern Express Bank, the borrower paid 72,000 rubles for connecting to the insurance program, of which only 6,000 rubles went directly to the insurance company Reserve to pay for insurance.
How to get money back for imposed credit insurance?
1. Submit an application to cancel the insurance contract during the cooling-off period.
This is the name of the period established by the contract during which you can refuse insurance and return up to 100% of the paid insurance premium. From June 1, 2016, insurance contracts must have a cooling-off period of at least 5 working days; from 2018 it will be increased to 14 calendar days. When submitting an application during the cooling-off period, the insurance premium is returned in proportion to the unused period of insurance, that is, you will be able to return most of the amount spent on insurance. Please note that this rule does not apply to the bank's collective insurance program.
2. Look in your contract and insurance rules for the possibility of early cancellation of insurance.
If you have taken out group insurance, or the cooling-off period of 5 business days has already expired, you can study your contract and insurance rules and look there for other reasons for refusing insurance with a refund.
By law, banks and insurance companies can set their own rules for early termination of group insurance contracts, as well as in the event of refusal of insurance at the end of the cooling-off period. Sometimes you can refuse such insurance with a refund under certain conditions, for example, if you repay the loan early. However, there may not be an opportunity to receive money if you cancel your insurance early (and). In this case, there is no point in writing an application to refuse insurance: the contract will be terminated, but no one will return the money.
3. Collect the imposed insurance through the court. Unfortunately, this option is suitable only for a small part of borrowers. The fact is that judicial practice on challenging imposed insurance policies is mostly negative. However, in Russia, judicial practice in identical cases can differ significantly in different regions. Therefore, if the first 2 methods of returning money for insurance did not work, look for judicial practice on insurance in your region
