Loan repayment insurance terms

Valid as of 01.08.2025

The Terms and Conditions of LHV loan payment insurance describe the insurance cover for loan obligations, conduct in the case of a loss event, and the principles of compensation for damage.

LHV loan payment insurance is financial loss insurance that protects the borrower in case unexpected circumstances prevent the repayment of a loan taken from the credit institution. The insurance cover options include loss of employment and temporary incapacity for work of the borrower.

Insurer is AS LHV Kindlustus (hereinafter LHV).

The insurance contract consists of the insurance policy (hereinafter the Policy) and these terms and conditions of the LHV Loan Payment Insurance (hereinafter the Terms and Conditions). Before concluding an insurance contract, the policyholder must check the accuracy of the information and the suitability of the scope of the insurance cover set out in the offer and read the Terms and Conditions.

Policyholder is a person who enters into an insurance contract and pays insurance premiums. The policyholder may be different from the insured person if they have a legitimate interest in insuring the insured person's loan obligation (for example, a spouse sharing a common household).

Insured person is the person indicated on the Policy who has taken out a loan and insured it with the loan payment insurance. The insured person can be a person up to 64 years of age (inclusive).

Contact details for the insurer

Customer support
Mon–Fri 9 am–5 pm
699 9111
insured@lhv.ee
lhv.ee

Claims adjustment
Mon–Fri 9 am–5 pm
680 1122
kahjud@lhv.ee
lhv.ee

Definitions

Doctor is a person registered in the register of health care professionals who has the legal right to work as a doctor and who is impartial towards the policyholder.

Automatically renewable insurance contract is a one (1) year insurance contract, which is renewed annually for the next insurance period, unless the contracting parties wish to amend or terminate the insurance contract.

Indemnity limit is the maximum amount to which LHV shall compensate the damage caused as a result of the insured event. The indemnity limit can be set for a specific event or risk.

Loss event is an unexpected event that results in a financial loss. The loss event may or may not be an insured event.

Insured event is an event provided for in these Terms and Conditions, in the event of which LHV must fulfil their obligation to perform arising from the contract. Losses incurred as a result of the same unexpected and unforeseeable event are considered to be a single insured event.

Insurance cover is LHV’s obligation, limited by these Terms and Conditions, to pay insurance indemnities in the case of insured events specified in the Policy or otherwise perform the insurance contract.

Insurance period is the period stated in the Policy during which the loss or damage caused by an insured event will be compensated by LHV.

Sum insured is the amount of money stated in the Policy up to which LHV will compensate for the damage caused by an insured event.

Policyholder’s close relatives are their parent, grandparent, child, brother, sister, grandchild, spouse, and partner.

Insurable value is the actual value of the loan obligations at the time of the insured event.

Compensation is redundancy benefit paid by the employer, redundancy benefit paid by the Estonian Unemployment Fund or any other financial compensation upon termination of the employment relationship.

Lender is a credit institution.

Loan contract is a contract between a policyholder and a lender under which the lender has granted a loan to the policyholder with an obligation to repay the loan.

Monthly loan payment is a loan instalment consisting of a repayment of the principal amount of the loan and an interest payment. The policyholder pays the lender the monthly instalment of the loan regularly, on the due date specified in the contract. Deviating repayments are insured up to the amount of the loan instalment. In the case of a loan with a residual maturity, the last residual payment is not treated as a monthly loan payment.

Excess period is the period of time after the loss event has occurred, for which no compensation is payable.

Waiting period is the period after the entry into force of the insurance contract, during which the insurance cover is not valid. In the case of an automatically renewable insurance contract, the waiting period is only applied upon entry into the first insurance contract.

Employment relationship is the employment of the policyholder for an unspecified term or for a specified term of at least 12 months in Estonia on the basis of an employment contract, public service or a contract of a member of the management board, which prescribes a working week of at least 20 hours.

Certificate of incapacity for work is a sick leave certificate or certificate for care leave issued to an insured person by a doctor for the care of their child up to 18 years of age (inclusive).

Loss of employment
An insured event during the insurance period is: loss of income as a result of loss of employment, if it is caused by the insured person’s:
1. unforeseeable termination of the employment relationship at the initiative of the employer for reasons beyond the control of the insured person or due to the insured person’s state of health;
2. removal from the management body of a legal person not controlled by the insured person or their close relative.
The insured person is not insured for their:
1. loss of employment or becoming aware of such loss before entry into an insurance contract, during a probationary period or waiting period, including in the case where the liquidation of the job is known but a notice of redundancy has not yet been submitted;
2. loss of employment due to state of health if there was doubt regarding the occurrence of the disease which caused it before entry into the insurance contract and a doctor’s appointment or outpatient examinations to diagnose the disease were agreed upon or if the insured person disregarded the treatment plan prescribed by the doctor;
3. planned termination of the fixed-term employment relationship and/or non-renewal for a new period;
4. termination of employment for a reason arising from the insured person (except due to state of health), at their request or by agreement of the parties;
5. the termination of the employment relationship in a company in which they or a person close to them has control over the employer’s activities and decisions by virtue of being a member of the employer’s management or supervisory board;
6. termination of employment if the decision to terminate the employment was taken by them or by a person close to them;
7. retirement to receive an old-age pension;
8. loss of employment by a self-employed person or the suspension of their activities;
9. loss of employment due to a criminal proceeding or a court judgment;
10. loss of employment caused by their consumption of an alcoholic, narcotic, psychotropic, toxic or other substance that caused the intoxication;
11. loss of employment caused by war or a political armed conflict, terrorist act, insurrection, riot, or strike; hostile acts, mass disorder, coup d'état, or a state of emergency.
Principles of compensation for the loss of employment
1. The insurance indemnity is the monthly loan payment or a proportional part thereof if the compensation period is less than a month.
2. The waiting period for the insurance cover for the loss of employment is 90 calendar days from the entry into force of the insurance contract. If the insured person is unemployed at the time of entry into the insurance contract, the waiting period starts on the day of commencement of work.
3. The day following the last day of the employment relationship is deemed to be the date of occurrence of the insured event.
4. If an employment relationship is terminated before the expiry of the term for advance notice prescribed by law, the date of occurrence of the insured event shall be deemed to be the last day of the term for advance notice prescribed by law.
5. If compensation is paid to the insured person in connection with the termination of the employment relationship, the day following the last day of the compensation period is deemed to be the day of the insured event. For the calculation of the compensation period, the amount of compensation is divided by the amount of the average wages for the last six (6) months of the employment relationship.
6. The insurance indemnity is calculated on a daily basis and the payment starts on the day following the excess period and ends no later than 12 months later. If the insured event is based on the termination of a fixed-term employment contract, compensation is paid up to the term of the employment contract, but not more than 12 months.
7. The insurance indemnity is not paid for a period when the insured person was not registered as unemployed at the Estonian Unemployment Insurance Fund.
8. Payment of the insurance indemnity is terminated when the insured person returns to work.
Temporary incapacity for work
An insured event is temporary incapacity for work during the insurance period, which lasts for more than 30 calendar days. The basis for temporary incapacity for work is a certificate of incapacity for work issued by a doctor if the reason for this is the illness or bodily injury of the insured person or their minor child, due to which the insured person cannot perform their usual duties or perform other work.
Insurance does not cover:
1. the period of incapacity for work during which the insured person continues to work;
2. incapacity for work caused by the insured person’s consumption of an alcoholic, narcotic, psychotropic, toxic or other substance which caused the state of intoxication, and a causal link between the state of intoxication and the temporary incapacity for work can be presumed;
3. incapacity for work arising while acting as a pilot or crew member of an aircraft or while flying in any capacity other than as a passenger on a regular passenger flight;
4. incapacity for work caused intentionally by the insured person;
5. incapacity for work caused by a crime committed by the insured person;
6. temporary incapacity for work due to illness or bodily injury caused before the entry into force of the insurance contract, including if the certificate of incapacity for work has been issued after the conclusion of the insurance contract, but there was doubt about the illness or bodily injury caused by it even before the conclusion of the insurance contract, for example, a doctor’s appointment or an outpatient examination had been agreed;
7. incapacity for work related to pregnancy and childbirth, except for in the case of medically confirmed complications;
8. temporary incapacity for work caused by war or a political armed conflict, terrorist act, insurrection, riot, strike; hostile acts, mass disorder, coup d'état, or state of emergency;
9. temporary incapacity for work due to a permanent or chronic illness, unless more than two (2) years have elapsed since the last period of incapacity for work for the same illness.
Principles of compensation for temporary incapacity for work
1. The insurance indemnity is the monthly loan payment or a proportional part thereof if the period of compensation is less than a month.
2. The date of the occurrence of the insured event is deemed to be the date of issue of the certificate of incapacity for work.
3. The insurance indemnity is calculated on a daily basis and the payment starts on the day following the excess period and ends no later than 12 months later.
4. The insurance indemnity is paid on condition that the insured person does not work during the period of temporary incapacity for work.
General principles for indemnification
In the event of an insured event, LHV shall compensate the insured person for the financial damage caused by the fact that the insured person is unable to perform the obligations arising from the loan contract to the lender due to the insured event.
LHV shall pay the insurance indemnity after the completion of the acts necessary to determine the occurrence of the insured event and the extent of the insurance indemnity.
LHV shall make a decision on the compensation of direct damage within 10 working days of receiving all the necessary information on the loss event and the amount of damage. If, for reasons beyond LHV’s control, it is not possible to determine the full amount of the damage, LHV shall first compensate the part of the damage, the extent of which is clear. LHV may, for good reason, extend the term for making a decision on compensation for damage.
LHV is not required to compensate more than the amount of the sum insured or the indemnity limit indicated on the Policy. Also, the compensation cannot exceed the actual amount of damage, including if the sum insured is higher than the insurable value at the time of the insured event or if several insured events occur at the same time. If there are several insured persons on the Policy and several insured events occur at the same time, the total indemnity for all insured events and insured persons cannot exceed the obligations under the loan contract.
The indemnity limit for all loss events for one (1) insured person is 24 monthly loan payments over a five (5) year period.
LHV’s obligation to indemnify terminates upon expiry of the loan agreement.
LHV pays the insured person loan instalments, the term for the payment of which is as of the moment of notification of the loss event or as of the moment when the event became an insured event, if it occurred later. By agreement, the beneficiary may also be the lender.
If LHV should pay compensation for the monthly loan payment for a period shorter than one (1) month, the compensation shall be calculated in proportion to the number of days in that month.
If the insurance indemnity has been paid out to the full extent of the sum insured during the insurance period, LHV is entitled to the premium for the current insurance period.
Conduct in the case of a loss event
The insured person must, in the case of a loss event:
1. take measures to prevent or reduce further damage;
2. notify LHV of the occurrence of a loss event at the earliest opportunity;
3. follow the code of conduct provided by LHV;
4. provide LHV with correct and complete information on the circumstances of the loss event;
5. take into account the fact that LHV may request documents and explanations, both orally and in writing, in order to establish the circumstances of the loss event.
After becoming unemployed, the insured person is obliged to register as unemployed with the Estonian Unemployment Insurance Fund and inform LHV thereof.
The insured person is obliged to prove incapacity for work with a certificate of incapacity for work issued by a doctor and a medical history.
Obligations of the insured person and the policyholder
The insured person is obligated to:
1. inform LHV of any material fact which may affect LHV’s decision on the conclusion of the insurance contract, the insurance covers, the sums insured, the insurance period, the premiums, or other contractual conditions;
2. inform LHV of the circumstances that increase the insurance risk;
3. inform LHV immediately of any change in circumstances about which LHV has requested information before the conclusion of the insurance contract, the addition of insurance covers, the increase of the sum insured or the extension of the insurance period, including in the event of a change in the insured person’s occupation, profession, sport, hobby or its level, their country of permanent residence or place of work, as well as in the event of a disability or a partial or no work ability being diagnosed in the person insured under the additional insurance cover;
4. notify LHV of the occurrence of an insured event, either themselves or through a third party, immediately after becoming aware of it;
5. provide LHV with truthful information and evidence necessary to establish the fact of the insured event, the cause of the insured event, and the amount of the insurance indemnity;
6. forward to LHV the documents and explanations required by LHV for ascertaining the facts of the loss event, which certify the occurrence of the insured event, for example, in the event of loss of work, to forward a document confirming their registration as unemployed at the Estonian Unemployment Insurance Fund once a month;
7. make every effort to prevent an insured event and reduce potential loss or damage and avoid the possible increase of the insured risk;
8. inform LHV of the termination of their registration as unemployed, the end of the period of incapacity for work, and the commencement of work;
9. return the insurance indemnity paid to them to LHV if, after indemnification of the damage, circumstances precluding indemnification by LHV become apparent;
10. enable LHV to investigate the circumstances of the insured event in order to identify the amount and circumstances of the loss or damage and, if necessary, to involve experts to determine the circumstances of the insured event.
The policyholder is obliged to:
1. explain the rights and obligations arising from the insurance contract to the insured person;
2. pay insurance premiums to the extent and by the term indicated in the insurance contract;
3. inform LHV, at the time of the conclusion of the insurance contract, of all material circumstances of which they are aware which have an effect on LHV’s decision to conclude the insurance contract or to do so on special terms.
Obligations of LHV
LHV is obliged to:
1. start handling the loss event immediately after receiving the notice of loss, and determine the amount of indemnifiable loss;
2. after receiving the notice of loss, inform the insured person of which documents must be submitted to LHV in order to determine the cause and amount of the loss;
3. make a decision on compensation for damage or refusal to do so no later than within 10 working days after the receipt of all required documents and determination of the amount of damage and the circumstances of its occurrence;
4. compensate the loss or damage caused by the insured event or pay the agreed monetary sum or insurance indemnity in a lump sum or in instalments or otherwise fulfil the insurance contract as agreed. If LHV delays in the performance of a financial obligation, it is required to pay default interest at the rate provided in the Law of Obligations Act ;
5. refuse to pay the insurance indemnity if the payee is subject to a respective international financial sanction imposed by the Government of the Republic, the United Nations, the European Union, the United Kingdom or the United States of America.
Exemption from the performance of the insurance contract
LHV has the right to refuse compensation or reduce the insurance indemnity if:
1. the insured person or the policyholder has misled or attempted to mislead LHV as to the circumstances in which the insured event occurred or the amount of the insurance indemnity, or has otherwise attempted to deceive LHV as to the terms of the insurance contract or its performance;
2. it is an event, as a result of which the loss or damage caused is not compensated on the basis of the Terms and Conditions;
3. the insured person or the policyholder has intentionally provided LHV with false or misleading information or has failed to provide important information concerning material facts of the insurance contract or the loss event;
4. in the event of an insured event, the insured person fails to comply with LHV’s written orders, refuses to cooperate or avoids cooperating;
5. the insured person causes an increase in loss or damage or an extension of the period of compensation for loss or damage after the occurrence of the insured event, for example, ignores the treatment plan prescribed by their doctor or does not seek new employment;
6. the insured person has failed to comply with any of the obligations provided for in these Terms and Conditions and there is a causal link to the occurrence of damage;
7. the insurance premium or the first insurance premium which has fallen due has not been paid by the time of occurrence of the insured event;
8. the recipient of the payment is subject to an international sanction or may be involved in money laundering or terrorist financing;
9. the conditions set out in clauses 16–18, 19.1, 19.2, 19.4, 19.5 or 19.6 of the Terms and Conditions have not been met.
Validity, termination, and cancellation of the insurance contract and withdrawal from the contract
The insurance contract enters into force and the insurance cover begins on the start date of the insurance period specified in the Policy and ends on the end date of the insurance period specified in the Policy. The insurance contract is deemed to have been concluded and all its terms and conditions are deemed to have been accepted at the moment the first premium is received by LHV.
If the first premium is received after the period of validity of the offer, LHV may change the starting and ending dates of the insurance period and the amount of the premiums fixed in the offer by informing the policyholder thereof.
If the first premium is received by LHV during the period of validity of the offer, but after the start of the insurance period indicated in the offer, the insurance period will start on the day following the date of receipt of the premium.
A fixed-term insurance contract expires after the end of the insurance period.
The open-ended insurance contract is valid until it is cancelled and LHV sends the policyholder a new policy 45 calendar days before the end of the insurance period.
The insurance contract terminates:
1. at the end of the insurance period;
2. upon cancellation of the insurance contract;
3. upon withdrawal from the insurance contract;
4. by mutual agreement between the policyholder and LHV;
5. on other bases provided for in legislation.
Parties have the right to terminate an open-ended insurance contract at the end of the current insurance period by giving at least 30 calendar days’ notice.
When the loan agreement related to the insurance contract ends, so does the insurance contract.
LHV has the right to cancel the insurance contract, subject to the cancellation deadlines prescribed by law, if:
1. the policyholder or the insured person has failed to comply with the insurance contract, including failure to pay the premium by the due date or by an additional deadline;
2. the policyholder or the insured person has intentionally provided LHV with false information about the insurance contract and/or the circumstances of the insured event;
3. the insured risk has increased, including where the insured risk has increased independently of the insured person, and the policyholder does not agree to amend the insurance contract retroactively from the increase in the insured risk;
4. other grounds for cancellation of the insurance contract established in the legislation emerge.
LHV has the right to withdraw from the insurance contract if the Policyholder has failed to notify LHV of material facts affecting the insurance risk when concluding the insurance contract and/or has knowingly provided false information (including deliberately avoided reporting a material fact). LHV may withdraw from the insurance contract within one (1) month after it became aware, or should have become aware, of the Policyholder’s failure to comply with the notification obligation.
If the insurance premium paid (including the instalment) is less than the amount to be paid indicated on the Policy, the insurance premium is deemed not to have been paid. If LHV does not file an action for the collection of an insurance premium within three (3) months after the payment becomes collectible, it is presumed that it has withdrawn from the insurance contract.
If the insurance contract has been concluded by a means of communication, the policyholder has the right to withdraw from the insurance contract within 14 calendar days from the conclusion of the insurance contract. The policyholder must submit an application to LHV concerning withdrawal in a format that can be reproduced in writing. In the event of withdrawal, LHV will return the paid insurance premium. If LHV has provided the policyholder with immediate insurance cover, the policyholder does not have the right of withdrawal.
If the insurance contract has been concluded for a period of more than one (1) year, the policyholder has the right to withdraw from the insurance contract within 14 calendar days of the conclusion of the insurance contract. The policyholder must submit an application to LHV concerning withdrawal in a format that can be reproduced in writing. In the event of withdrawal, LHV will return the paid insurance premium. If LHV has provided the policyholder with immediate insurance cover, the policyholder does not have the right of withdrawal.
If an insured event has occurred and LHV has made a decision to compensate or refuse to compensate loss or damage, the parties have the right to terminate the insurance contract at the earliest opportunity.
If the insurance contract has been cancelled or withdrawn from, the parties to the insurance contract will no longer have any obligations arising from the contract from the date of termination of the insurance contract. The rights and obligations of the parties, including the policyholder’s obligation to pay premiums to LHV, remain in effect until the termination of the insurance contract.
If the insurance indemnity has been paid out to the full extent of the sum insured during the insurance period, LHV is entitled to the premium for the current insurance period.
Notifications
All notices necessary to comply with the Terms and Conditions shall be provided in a form that can be reproduced in writing or in a form prescribed by LHV.
Processing of personal data
LHV has the right to process personal data related to the conditions on the basis of LHV’s customer data processing principles and to disclose information related to the conditions to a third party whose right to receive information arises from LHV’s customer data processing principles.
LHV has the right to preserve the recordings received by means of communication or other means in connection with the fulfilment of these Terms and Conditions and, if necessary, use them to prove the declarations of intent submitted by the policyholder.
Law applicable to the Terms and Conditions and limitation of claims under the insurance contract
The law of the Republic of Estonia applies to the Terms and Conditions.
The limitation period for claims arising from the insurance contract is three (3) years. The limitation period shall run from the end of the calendar year in which the claim becomes collectible.
Discrepancies in the insurance contract documents
In the event of inconsistencies in the insurance contract documents, the interpretation will be based on the presumption that the special terms and conditions stated in the insurance contract take precedence over these Terms and Conditions.
If the Terms and Conditions have been translated into a foreign language, their interpretation will always be guided by the Estonian language Terms and Conditions in the event of a dispute.
Supervision and resolution of complaints
If the policyholder does not agree with the decision of LHV or requests additional explanations, they have the opportunity to contact LHV by email at kindlustus@lhv.ee, by phone at 699 9111 and by post at Tartu mnt 2, 10145, Tallinn.
The extrajudicial bodies for resolving disputes are the conciliation body of the Estonian Insurance Association, Mustamäe tee 46, 10621 Tallinn (phone 667-1800, email lepitus@eksl.ee), and the Consumer Protection and Technical Regulatory Authority, Endla 10a, 10122 Tallinn (phone 667-2000, e-mail info@ttja.ee).
The activities of LHV as the insurer are supervised by the Financial Supervision Authority (Finantsinspektsioon), Sakala 4, 15030 Tallinn (phone 668-0500, e-mail info@fi.ee, website www.fi.ee). The Financial Supervision Authority does not settle contractual disputes between insurer, insurance agent and insured person.
If no agreement is reached, the parties have the right of recourse to the county court.