Securing construction financing with RVL

Death of my wife => Beneficiary: me
My death => Beneficiary: my wife
Death of both of us => Beneficiary: our daughter

And the bank did not require an assignment?

We have a life insurance policy where both are covered, about 250,000 euros, but the bank has a right to have a say in what happens with the money. It costs about 27 euros per month.

And the bank did not require an assignment?

It only makes sense to me if the bank sees a risk in the house sale. The RVL only benefits you personally, so that you can then pay off the house or the loan. But the bank already has the house as collateral anyway.

There are also insurances where the money can only be used for the repayment of the installments or the amount is even deposited directly into the loan agreement (without crediting against special repayment or prepayment). Furthermore, one could also insure only the due installments/(or only interest) until the estimated end of education of the youngest child to reduce the amount and thus achieve a more affordable premium. There are many possibilities; an experienced insurance broker can help.

For me, that only makes sense if the bank sees a risk with the house sale. The RVL only benefits you, so that you can then pay off the house or the loan. But the bank already has the house as collateral.

That may be, the contracts were concluded in 2014 at which time there were no such enormous price increases in real estate. Currently, however, that should be obsolete, since our property is valued at almost 700k-800k.

And the bank did not require an assignment? We have a life insurance policy that covers both, about 250,000 euros, but the bank has a say in what happens with the money. It costs about 27 euros per month.

The bank did not require an assignment. The insurance was also not mandatory from the bank's side, but we wanted to have a life insurance policy to cover the worst case. The insured amount corresponds to the purchase price of the apartment, so that the surviving dependent could easily maintain it.

I have now chosen the following model... insured myself as the main earner over (almost) the entire insured amount, decreasing linearly over 30 years. I thought about whether to choose annuity or linear for a long time. However, linear was cheaper, and I don’t know the interest rate for the follow-up financing with the annuity option. With the long term, I have been able to balance this somewhat. With special repayments, it works out anyway. What do you think about linear vs. annuity decreasing? My wife, on the other hand, is insured constantly with 200K over 20 years. Hopefully, that should be sufficient.