For residential financing a death benefit is checked. The overview shows a sum insured, alongside an initial loan balance. The two initial figures alone do not yet show whether the proposed cover would fulfil the same purpose at later points in time. For a meaningful comparison the actually offered terms and the concrete financing plan are required.
Describe the desired purpose first
Should the sum actually owing on the loan in the event be covered, should a different amount of money remain available, or should a particular person be relieved? These objectives are not automatically identical. Who receives a benefit, under which conditions it would be due and which rights the bank has must be technically explained with reference to the actual documents.
This article does not set a personal sum insured. It does not deal with medical risk assessment and does not claim any particular scope of benefits of any policy. Its calculation case works exclusively with expressly specified amounts.
Place the same dates side by side
Record for selected points in time the outstanding balance assumed in the sample plan and the sum insured provided for under the specific offer to be examined. Note in each case whether the value is contractually fixed or depends on further assumptions. Start and end dates are included as well.
In a purely fictional case there are initially a €200.000 loan and €200.000 proposed benefit. After ten years the assumed loan plan states an outstanding balance of €145.000, whereas the benefit plan compared with it provides only €120.000. The difference is €25.000. This calculation describes a gap for the purpose chosen here of full numerical debt coverage; it does not determine a general personal protection need.
An appropriate amount can also be at the wrong time
Check for a possible timing gap between the start of the loan and the confirmed start of the insurance cover as well as between the planned end of the loan and the end of the cover. This article does not assert that such gaps occur in every offer. It recommends comparing the actual data rather than reading two term indications as identical without checking.
If loan term, amount or repayment are changed later, the previous comparison does not automatically remain correct. An earlier special repayment can change the financing need; an additional borrowing can do so as well. Any changes to the cover will be examined separately.
Go into the advice session with a targeted question
Show the specific date and the discrepancy there. Ask whether your desired purpose would be achieved by the actually agreed benefits and what further checks are necessary. An identical initial sum is not a sufficient answer.
The result is a comprehensible comparison of purposes, amounts, beneficiary designation and timing. A suitable individual insurance and financing decision will only follow after full examination of the actual terms.