So you’ve made your dream move to Spain, and now you’re thinking of buying a house. While speaking with banks and lenders, you might have noticed different mortgage rates available, with and without certain benefits or incentives. Life insurance is a common add-on that banks provide in return for a reduced interest rate. But do you need life insurance to get a mortgage in Spain? Do you need to take it out with your bank or can you choose your own policy? This blog post will explain the ins and outs of life insurance in Spain.
Life insurance is a special type of insurance policy that pays out a sum of money either on the death (or in some cases, disability) of the insured person, or after a set period of time. The payout provides financial support to the beneficiary, usually a member of the policyholder’s family, to help cover expenses like funeral costs, living expenses, or outstanding debt. This can be especially important if the deceased person was the primary or sole income earner in the family.
Every life insurance policy is different, but typically the policy holder pays regular premiums or a lump sum to the insurance company. In return, the insurance company agrees to provide a payout (often called a death benefit) to the beneficiary.
Factors that may influence the premium include: age, health, lifestyle, and the amount of coverage in the insurance policy. Some policies also offer benefits for critical illnesses or disabilities.
While it's not mandatory to have life insurance when taking out a mortgage in Spain, it can provide certain benefits. Typically, in return for taking out life insurance with them, your bank will offer an incentive of a reduced interest rate. You are not obligated to take their insurance policy, but in this case, you will not get the reduced interest rate. In fact, the Spanish Mortgage Law allows you to choose your life insurance provider, and you're not forced to take the one offered by your bank.
Many banks in Spain will try to pressure you into accepting their policy, but it’s advisable to compare different life insurance options and choose the one that best suits your needs. It's crucial to compare different life insurance policies, considering both the cost and the coverage offered, before making a decision.
There are many reasons to contract a life insurance policy in Spain, and many of these advantages can be tied to your mortgage:
Caser Expat Insurance is proud to offer life insurance policies to expats in Spain. We believe that protecting your family’s future is of the utmost importance, especially when you have children.
For Caser life insurance, the price of the policy depends on factors such as age (the older you are, the higher the premium will be), the capital to be insured (the amount of the indemnities that the beneficiaries will receive), as well as personal aspects such as health, habits, and profession. All of this will be assessed when contracting your Caser policy. Find the types of Caser Expat life insurance below and their coverages which are included or optional:
Mortage and life insurance. Interest rates. Agency fees...If you’re embarking on the journey of home ownership, we know that it can be daunting. Even more so in another country and another language. Life insurance with your mortgage isn't the only thing you should be aware of. The resources below will aid you along your way, with information about buying a home, home insurance, investing in a home, home downpayment, and more!
Now that we’ve reached the end of our post, we just want to reiterate what was communicated above. While life insurance to get a mortgage is not a legal requirement in Spain, it's a wise choice to protect your family and ensure the mortgage is paid off in unforeseen circumstances. Caser Expat Insurance is here to guide you in your decision-making and offer you the best life insurance policies for expats.