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When borrowing such a large sum it is advisable to take some precautions so that you or your loved ones do not have to deal with a catastrophic situation. The lending institutions themselves usually require you to take them.
If you were to die during the repayment period of your mortgage the insurance would repay a percentage of the outstanding balance that had been agreed beforehand. This would spare your nearest and dearest a heavy financial burden.
An endowment insurance pays out upon attaining a particular age or in the event of death. Every month you pay interest and the life assurance premium, but you yourself decide when and by how much you pay off your capital. If you die or retire, the insurance policy pays off your debt with the bank.
Guaranteed Housing Insurance gets off to a new start from 1 April 2009. This insurance had been abolished in August 2008, when the contract between the Flemish government and Ethias ended with no new insurer being found.
This insurance covers people who are no longer able to repay their mortgage loan owing to involuntary unemployment or work disability.
If you have taken out a mortgage loan after 1 August 2008, you will also be able to take out this insurance under the same conditions.
If you lose your job between now and 1 April 2009, you will be able to benefit from a transitional regime where the public authorities will themselves act as guarantors in the event of loss of income.