Loan repayment insurance terms

Valid as of 01.06.2025

The terms and conditions of the 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 a financial loss insurance that protects the borrower in the event of unexpected circumstances that prevent repayment of the loan. Insurance cover is available for the borrower's loss of employment and temporary incapacity for work, in which case the insured person is unable to fulfil the obligations arising from the loan contract due to an insured event.

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). The Policy is an insurance offer before the payment of the first insurance premium, but after the payment of the first insurance premium, a document confirming the conclusion of the insurance contract. The Policy indicates the sum insured of the insured object and the period of insurance deductible (the period during which the loan payments incurred are borne by the policyholder). 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 examine these Terms and Conditions.

Insurance provider is AS LHV Kindlustus (hereinafter “LHV”).

Policyholder is the person indicated on the Policy who concludes an insurance contract with LHV.

Insured person is the borrower indicated on the Policy.

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 insured person.

Automatically renewable insurance contract is a one-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 is the amount LHV shall reimburse to the insured person for the monthly payment of the loan.

Indemnity limit is the maximum amount to which that 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 caused by the same sudden and unforeseeable event are considered as a single insured event.

Insurance cover is the LHV’s obligation, limited by these Terms and Conditions, to pay insurance indemnity 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. The sum insured is determined as a monthly payment of the loan.

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.

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.

Insurance deductible is the period 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 an insured person for an unspecified term or for a specified term of at least 13 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).

Insurance cover

The cover provided by the insurance contract is indicated on the Policy.

1. Loss of employment

2. An insured event is the loss of income during the insurance period as a result of loss of employment, if the cause is:

   1. unforeseeable termination of 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. early termination of the employment relationship by a decision of the employer's higher management body if the insured person is a member of the company's management or controlling body and the contract is not terminated at the request of the insured person or by agreement of the parties;
   3. extraordinary termination of a fixed-term employment contract at the initiative of the employer.

3. Insurance does not cover:

   1. loss of employment or becoming aware of it before entry into an insurance contract, during a probationary period or waiting period, including in the case of the liquidation of the company or department 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. self-employed persons or suspension of their activities;
   6. termination of the employment relationship at the initiative of the employer if a member of the supervisory board or management board of the employer was a close relative of the insured person (including a partner, parent, child, brother, sister), except for in the event of bankruptcy of the company;
   7. retirement of the insured person to receive an old-age pension;
   8. loss of employment if the insured person has not registered as unemployed at the Estonian Unemployment Insurance Fund;
   9. loss of employment due to criminal proceedings or court judgments.

4. The waiting period for the insurance cover for the loss of employment is 90 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.

5. Principles of compensation for the loss of employment

   1. The day following the last day of the employment relationship is deemed to be the date of occurrence of the insured event.
      1. 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.
      2. 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 of the last six months of the employment relationship.
   2. Insurance indemnity is paid for days exceeding the insurance deductible, but not for more than 12 months.
   3. In the case of an insured event, the basis for which is termination of a fixed-term employment contract, indemnity shall be paid until the term of the employment contract, but not for longer than 12 months.
   4. The insurance indemnity is the monthly payment of the loan or a proportional part thereof if the compensation period is less than a month.
   5. Insurance indemnity is not paid for a period when the insured person was not registered as unemployed at the Estonian Unemployment Insurance Fund.
   6. Payment of insurance indemnity is terminated when the insured person returns to work.

6. Temporary incapacity for work

7. An insured event is temporary incapacity for work during the insurance period, which lasts for more than 30 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.

8. Insurance does not cover:

   1. a period of incapacity for work when the insured person continues to work and their income does not decrease;
   2. 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;
   3. temporary incapacity for work caused by the care of another close relative, if the person being cared for is not a child of the insured person up to 18 years of age (inclusive);
   4. incapacity for work related to pregnancy and childbirth, except for in the case of medically confirmed complications;
   5. quarantine, self-isolation and epidemic or pandemic-related events (except influenza epidemics).

9. Principles of compensation for temporary incapacity for work

   1. The date of the occurrence of the insured event is deemed to be the date of issue of the certificate of incapacity for work.
   2. Insurance benefit is paid for days exceeding the insurance deductible, but not for more than 12 months.
   3. The insurance benefit is the monthly payment of the loan or a proportional part thereof if the period of compensation is less than a month.
   4. The insurance benefit is paid on the assumption that the insured person is not working.

10. General principles for indemnification

11. 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.

    1. LHV shall pay the insurance benefit after the completion of the acts necessary to determine the occurrence of the insured event and the extent of the insurance benefit.
    2. LHV shall make a decision on the compensation of direct damage within ten 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 extend the term for making a decision on compensation for damage for good reason.
    3. 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.
    4. LHV's obligation to indemnify terminates upon expiry of the loan agreement.
    5. 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.
    6. If LHV should pay compensation for the monthly payment of the loan for a period shorter than one month, the compensation shall be calculated in proportion to the number of days in that month.
    7. The indemnity limit for all claims for one insured person is 24 monthly loan payments over a five-year period.
    8. LHV may set off the insurance benefit payable against the insurance premium or other claim it is entitled to under the contract which has become due and payable, even if it owes the performance of the obligation under the contract to a third party other than the policyholder.
    9. If the insurance benefit 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.

12. General exclusions

13. LHV does not indemnify for damage indirectly or directly caused by the following events, causes or consequences.

    1. Fines for delay and contractual penalties
       Fines for delay and contractual penalties occurred because of the late loan payments.
    2. Alcohol, drug and toxic substance use
       An insured event that has occurred due to the use of alcohol, narcotic drugs, psychotropic or toxic substances or medicines not prescribed by a doctor.
    3. Causing an insured event intentionally
       An insured event, the occurrence of which was caused by an insured person intentionally, including intentionally caused injury, attempted suicide, participation in or contribution to the commission of a criminal offence.
    4. Operations and manipulations not medically indicated or prescribed by a doctor
       Cases related to plastic and cosmetic surgery and other aesthetic treatments and tattoos, and the treatment of their complications.
    5. Sexually transmitted diseases, HIV and AIDS
       Sexually transmitted diseases, HIV and AIDS and diseases caused by them.
    6. Insured event arising from acts of terrorism, military activities and armed conflict
       Acts of terrorism, hostilities, political armed conflict, insurrection, civil unrest and similar states of emergency.

14. Conduct in the case of a loss event

15. In the event of a loss event, the insured person or, where applicable, their family member must:

    1. take measures to prevent or reduce further damage;
    2. notify LHV of the occurrence of an insured 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 from the insured person, both orally and in writing, in order to establish the circumstances of the claim;
    6. after becoming unemployed, register as unemployed at the Estonian Unemployment Insurance Fund and notify LHV thereof;
    7. provide proof of incapacity for work in the form of a certificate of incapacity for work issued by a doctor.

16. Obligations of the policyholder and insured person

17. The policyholder is obligated to:

    1. inform the insured person of entry into the insurance contract for their benefit and introduce the insurance contract, including insurance cover and conditions, and explain the rights and obligations arising from the insurance contract to them;
    2. pay insurance premiums to the extent and by the term indicated in the insurance contract.

18. The insured person is obliged to:

    1. pay insurance premiums to the extent that the policyholder is not required to pay under the terms and conditions;
    2. immediately notify LHV of a loss event after it occurs or becomes aware of it;
    3. forward 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 the registration as unemployed at the Estonian Unemployment Insurance Fund once a month;
    4. make every effort to prevent an insured event and reduce potential damage and avoid the possible increase of the insured risk;
    5. inform LHV of the termination of the registration as unemployed, the end of the period of incapacity for work and the commencement of work;
    6. return the insurance benefit paid to him or her to LHV if, after indemnification of the damage, circumstances precluding indemnification by LHV become apparent or if the damage is compensated by a third party;
    7. enable LHV to investigate the circumstances of the insured event in order to identify the amount of the loss and the persons responsible for the loss and, if necessary, to involve experts to determine the circumstances of the insured event.

19. Obligations of LHV

20. LHV shall be required to:

    1. start handling the insured 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 ten 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 damage caused due to the insured event or pay the agreed amount of money or the insurance benefit in one or more parts, or perform the insurance contract in any other agreed manner. LHV must pay out the insurance benefit within ten working days of receiving all the necessary documents and establishing the basis for payment. If LHV delays 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 benefit if the payee is subject to a corresponding restrictive international financial sanction established on the basis of UN resolutions or the relevant legislation of the European Union or the Republic of Estonia.

21. Exemption from the performance of insurance contract

22. LHV has the right to refuse to compensate or reduce the insurance benefit if:

    1. it is an event, as a result of which the damage caused is not compensated on the basis of the terms and conditions;
    2. the insured person 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;
    3. in the event of an insured event, the insured person fails to comply with LHV's written orders, refuses to cooperate or avoids cooperating;
    4. the insured person causes an increase in damage or an extension of the period of compensation for damage after the occurrence of the insured event, for example, ignores the treatment plan prescribed by the doctor or does not seek new employment;
    5. 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;
    6. 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.

23. Termination of insurance contract

24. 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 agreement between the policyholder and LHV;
    5. on other bases provided for in legislation.

25. Cancellation of insurance contract

26. LHV has the right to cancel the insurance contract, subject to the cancellation deadlines prescribed by law, if:

    1. the policyholder has failed to comply with the insurance contract, including failure to pay the insurance premium by the due date or by an additional deadline;
    2. the policyholder has intentionally provided LHV with false information about the insurance contract and/or the circumstances of the insured event;
    3. an insured event has occurred and LHV has made a decision to compensate or refuse compensation;
    4. the insured risk has increased, including where the insured risk has increased independently of the policyholder, and the policyholder does not agree to amend the insurance contract retroactively from the date of the increase in the insured risk.

27. Withdrawal from the insurance contract

28. LHV has the right to withdraw from the insurance contract:

    1. 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 month after it became aware, or should have become aware, of the policyholder’s failure to comply with the notification obligation;
    2. until payment of the insurance premium if the policyholder has not paid the first insurance premium within 14 days after entry into the insurance contract. 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 months after the payment becomes collectible, it is presumed that it has withdrawn from the insurance contract.

29. The policyholder has the right to withdraw from the insurance contract within 14 days after entry into the insurance contract if the insurance contract has been entered into:

    1. by a means of communication;
    2. for more than one year.

30. The policyholder must submit an application for withdrawal to LHV in a format that can be reproduced in writing. In the case of withdrawal, LHV shall return the paid insurance premium to the policyholder.

31. If LHV has provided the policyholder with immediate insurance cover, the policyholder does not have the right of withdrawal.

32. If the insurance contract has been withdrawn from, the parties to the insurance contract no longer have any obligations under the contract from the date of termination.

33. Underinsurance, overinsurance and multiple insurance

34. If the sum insured indicated in the Policy is less than the insurable value (underinsurance) at the time of the insured event, LHV shall be liable for the damage in proportion to the ratio of the sum insured to the insurable value at the time of the insured event.

35. If the sum insured stated in the Policy is significantly higher than the insurable value (excess), LHV shall compensate the actual amount of loss.

36. If a policyholder insures the same insured risk at several insurance providers and the total amount of insurance benefits paid by the insurance providers exceeds the amount of damage or the sum insured exceeds the insurable value (multiple insurance), the insurance providers shall be solidarily liable.

37. Submission of notifications

38. All notices necessary to comply with the conditions shall be provided in a form that can be reproduced in writing.

39. Processing of personal data

40. 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.

41. 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 insured person.

42. Limitation of claims under insurance contract

43. The deadline for claims under an insurance contract is three years. The limitation period shall run from the end of the calendar year in which the claim becomes collectible.

44. Inconsistencies in insurance contract documents

45. 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 the terms and conditions of insurance.

46. If the terms and conditions have been translated into a foreign language, the interpretation of the terms and conditions will always be guided by the Estonian language terms and conditions in case of dispute.