When signing a mortgage loan, it is advisable to have Life insurance that covers us in the event of a possible unexpected misfortune that crosses our path and leaves the family unit without part or all of the income, we have already explained it some other time.
However, such recruitment, while advisable, is not required by law. Nor is it legally permitted for the financial entity that grants us the mortgage loan to oblige us to subscribe that life insurance with a specific entity.
It is not mandatory to contract mortgage life insurance with the bank
Spanish laws do not oblige you to take out Life insurance to take out a mortgage loan . But the truth is that many banks do require hiring this protection as an essential condition to grant the loan. Even, in some cases, the requirement is that the mortgage life insurance be contracted with the specific insurer that the borrower indicates, a relationship prohibited by the Spanish Real Estate Credit Law of 2019.
Let’s see some data in this regard, from a study carried out by the General Council of Insurance Mediators in May of this year: almost 7 out of 10 people who apply for a mortgage or a consumer loan are not informed by the bank of the possibility to contract the insurance policy with any company. In addition, specifically in mortgages, in 74% of the cases the subscription of the insurance was an essential condition to formalize the concession.
Thus, it is necessary to insist that, in the face of the bank requirement to take out Mortgage Life insurance with a specific insurer in order to access a mortgage , the client can refuse. And, if the strategy of the finance company is more subtle – for example, improving mortgage conditions, after contracting with them the aforementioned life insurance for mortgage – the user has a real margin of maneuver, guaranteed by law, to look for it. Same Life insurance for your mortgage that really fits your budget and your needs, not the bank’s preferences.
Let’s do the math: bank mortgage life insurance vs insurance mortgage life insurance
It is a matter of making calculations because, although it seems that contracting these coverage with the bank benefits you in payments, it may not be like that, and that what lowers the cost on the one hand, increases it on the other. According to another study, this time from a couple of years ago and carried out by the publisher specialized in insurance Inese and Global Actuarial, the premium for Risk Life insurance in a bank is, on average, 48% higher than with an insurer . And these differences are especially marked in younger customer profiles .
Therefore, be lazy and calculate well what comes out more to account . And if making numbers of this type is difficult for you or you fear making a mistake, remember that you have experts who watch over you: both your insurance broker and your trusted insurer can help you in this regard. And the final decision on whether to hire mortgage life insurance or with whom to contract it, will always remain in your hand.
Since the mortgage is a bond that lasts over many years, it is important to take into account all these variables: what makes a small difference per month can become a significant amount over the years. Don’t forget that both the bank and the notaries are working for you and should clarify any questions you may have. Do not sign anything without being completely convinced, or without having patiently and carefully read all the fine print.