How to return insurance after paying off the loan ahead of schedule and on time – the procedure for registration and a package of documents

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For several years now, the country’s banking institutions have been offering individuals to insure themselves against accidents and illness when receiving a loan. The purchase of a policy is not mandatory, but upon its purchase, lenders offer more loyal conditions for processing funds on credit. For this reason, customers do not refuse such an attractive offer. However, along with this, many are interested in how to return insurance after paying off a loan at the bank, if the borrowed money was paid ahead of schedule.

Is it possible to return insurance after loan repayment?

Whether or not to purchase a voluntary insurance policy depends entirely on the borrower, since the bank does not have the right to impose this service. The insurance premium can be paid separately, asked to include it in the amount owed or deduct money from the loan. Making insurance will help protect the client and co-borrowers from financial problems that may arise in the event of disability, accidents and even the death of the borrower.

It is noteworthy, but bank employees willingly tell potential customers about all the benefits of applying for a policy and how to get reimbursement when an insured event occurs. However, few are aware that it is possible to return the money paid for insurance or part of it when paying off a loan before the expiration of the insurance contract.

With early repayment

To the question whether insurance is returned upon repayment of the loan, you can find out by carefully studying the contract. If you have free money and you decide to pay off your credit organization ahead of schedule, then in most cases the law will be on your side and you can return the rest of the insurance. The amount will be calculated based on the remaining months until the end of the contract after the date of full repayment of the loan.

Calculator, pencil and money

When repaying a loan on time

If the borrower repays the debt ahead of schedule and in the payments agreed upon in the contract, then after the last installment the loan contract will be closed and the voluntary insurance policy will end with it. Traditionally, insurance is bought for a period of one year with an annual extension. If you borrow money for several years, then insurance is issued for the entire period of the loan agreement. If you took a loan, for example, for 9 months, and the policy was issued for one year, you can safely demand a refund to you for the remaining 3 months.

In what cases it is impossible to return insurance for a loan

Before signing the contract, you must carefully read all of its paragraphs, where it will be written whether the client is entitled to a refund of the paid insurance premium or not. There are a number of points when you can’t get the money back for the policy, even if you paid off the debt ahead of schedule:

  • if there was an insured event, as part of the remuneration was paid;
  • if there are delays in payments, even if fines were paid, because you did not fulfill all the important terms of the contract on time;
  • if the loans were paid in accordance with the established schedule in full on time;
  • subject to the conclusion of a comprehensive insurance contract when the beneficiary is a banking institution;
  • if the contract contains a clause stating that insurance is not refundable upon full repayment of the loan.

Legal regulation

Legal illiteracy of the majority of the population of Russia allows banks and insurance organizations to turn the situation on the issue of returning insurance to their advantage. If we talk about the early termination of the insurance contract during the “cooling period”, here you can directly refer to Bank of Russia Ordinance No. 3854-U “On Minimum (Standard) Requirements for the Conditions and Procedure for Implementing Certain Types of Voluntary Insurance”, which entered into force on June 1, 2016.

Regarding the question of how to return insurance after repayment of the loan ahead of schedule, here you can be guided by the Law on Consumer Protection and the Civil Code, which give a person the right to terminate any contract concluded. However, according to the legislation itself, insurance companies are not obliged to return money to clients, however this can be challenged in court, but only if insurance covers life, financial risks and health.

Civil Code of the Russian Federation

How to repay consumer credit insurance money

Compulsory insurance applies only to collateral, so if you have taken a standard consumer loan, you can safely refuse to buy a policy. If the insurance was purchased, you can return it to the “cooling period”, which is legally allocated 5 days, although some banks extend this period. Provided that you have paid off the debt ahead of schedule, you can proceed as follows:

  1. carefully study the contract and find out whether it is permitted to return the insurance premium upon early repayment;
  2. if it is possible to carry out the procedure, collect the necessary package of documents, which includes a passport, a copy of the loan agreement and a certificate from the bank on the full repayment of debt;
  3. make an application to the insurance company and attach the collected papers.

Early repayment loan insurance repayment

In order to return insurance after repaying a loan ahead of schedule, a lot of effort is not required. However, it must be understood that problems may arise with this. This may be, for example, a failure of the insurance company. In addition, you should not rely on the fact that you will receive the full amount, because the policy was purchased for the entire debt repayment period. First of all, you need to realize whether it is worthwhile to engage in the return of funds, because sometimes the resulting benefits can be disproportionately small in comparison with the efforts that were expended.

Refusal to return

The most common option is the failure of the insurance company to return the money for the policy, or rather, for unused time in connection with early repayment of the loan. This is due primarily to the fact that clients inattentively read the contract before signing it, because the clause that the UK does not return the money in case of full repayment of the loan is often included in the contract, but written in small print. It is unlikely that he will be able to solve this problem himself, therefore it is recommended to use the services of a professional lawyer.

Partial Insurance Premium Compensation

It is possible to return part of the funds spent on the purchase of the policy, provided that the loan has been paid ahead of schedule, but the amount will be small. Here you need to be especially careful, since insurance companies can motivate their position by the fact that most of the funds were spent on administrative support, so they return so little money. If the cost of the policy is high, you can request a printout on the use of money, thereby achieving the return of the maximum possible funds.

Money in the hands of a man and a calculator

Full refund of insurance

Returning insurance is completely possible only if you repaid the loan ahead of schedule, but the debt term was one, maximum two months. Under such circumstances, the insurance company simply cannot prove what it spent most of the money on. At the same time, this is the only case where justice can be achieved without litigation.

How to pick up insurance after a loan is paid – registration procedure

Before returning insurance after full repayment of the loan, you need to find out how the contract was concluded. The fact is that most borrowers make a big mistake when they turn directly to the lender. This can only be done if the insurance is part of the services provided by the bank – the so-called comprehensive insurance. In all other cases, it is necessary to write an application to the insurance company, where the insurance premium is recalculated in proportion to the term of use of the loan.

Application to the insurance company

To terminate the insurance contract, you must write a statement to the insurance company. It must include your passport details, the number of the insurance contract and the reason why you are going to terminate the agreement. You can transfer it personally to the representative of the UK, but you need to make sure that he is assigned an incoming number, otherwise it will be difficult to prove anything. If this is not possible, you can send the appeal by registered mail, however, you will have to notarize your own signature and send the documents along with the application.

What documents must be provided

You need to understand that one statement will not do. First of all, you need to prepare a personal passport and a copy of the loan agreement. In addition, you will need to visit a bank branch, where you can get a certificate of lack of debt (full repayment of the loan). However, you must be prepared that the insurance company may request other documentation. For example, you may need information about the current account, since the refund is transferred to the client exclusively by bank transfer.

Do Sberbank loan insurance repayments

Since the majority of loans issued, according to statistics, are accounted for by the largest bank in the country, many are interested in how to return Sberbank loan insurance. This option is only possible with early repayment of debt. To do this, you need to contact the insurance company and write a statement to which you need to attach a certificate of lack of debt. This rule works with SK Sberbank Insurance, owned by the financial institution itself. If the policy was purchased from another organization, resolving the issue may be complicated.

Woman at the bank branch

Return of insurance after VTB 24 loan repayment

By issuing a loan at VTB24 and acquiring insurance, the bank will offer you favorable conditions that relate to lower interest rates. However, often employees offer to conclude a contract for a period of two to three years, citing the fact that this way the insurance will be cheaper. This is rational, but in the case of long-term loans issued, for example, to purchase a car or purchase real estate. With a consumer loan, this is not recommended, especially if the loan period is short. The procedure for returning part of the premium is similar to the above.

How to return Alfa Bank loan insurance

If you refer to the official website of the bank, you can find information that the bank returns insurance to its customers only during the “cooling period”, which lasts five business days from the date of conclusion of the contract. In all other cases, including in case of early repayment of the loan, it is necessary to look at the loan agreement, where such an opportunity and procedure for repaying funds should be spelled out.

What to do if the insurance company refuses to accept the application

Provided that the insurance company does not want to return the money, although the agreement does not prevent this, there are two ways to go depending on the type of loan. If you have paid your mortgage or car loan ahead of schedule, you can write an application to change the beneficiary. In this situation, SK will pay the agreed part to the person for whom the property will be registered.

With consumer lending, you will have to go to court or apply to Rospotrebnadzor. However, before that, you should carefully study the judicial practice of such statements in order to understand what is the likelihood of a favorable outcome in your favor. Turning to the court, it is important to understand that in case of loss all legal costs will fall on your shoulders, so if the amount of insurance premium to be returned is not high, you need to think about whether to start this business.

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