When we decide to buy a house and take out a mortgage, the banks ask us to take out life insurance so that they can move forward. Nowadays many people think that because they take out a loan with the bank they are obliged to take out this same insurance with the insurance companies that work in conjunction with the banks in question. Why? That's what I'm going to explain. I'm of the opinion that we should be the ones to choose what we want to buy and not have rules and products imposed on us that suit the organisations best in order to manipulate consumers. The good news is that fortunately we have decrees that protect us, because when we go to buy a house, the bank manager tells us that in order to lower the price of the house, we have to pay for it. spread When you take out a loan, you have to take out various products, including life insurance. This is where consumers can say that they want to take out this insurance with their intermediary, or with one that simply offers them the best price and the necessary cover to ensure that their life is safeguarded if something bad happens. On 10 December 2009, the Decree-Law 222/2009 of 11 September, which changed the way banks manage this issue, consumers can now take out or even transfer their mortgage life insurance depending on their preference. How important is it to have this kind of insurance associated with your mortgage? In the event of death or temporary or permanent invalidity, the company the consumer has chosen will safeguard the settlement of the total debt in the event of a claim in both circumstances and thus allow the house not to remain on the market and the heirs, or even other borrowers if they are a couple, to be left with a higher cost than they can afford due to the loss of a contributor, the cover in this circumstance allows this to be safeguarded. In this legislation, the only requirement is that the company maintains the same cover and that the insurer is authorised by the ASF operating in the Life Branch. What are the pros and cons of this decision? Most of the time there are significant savings to be made with this change, combined with the fact that we have someone we trust with our insurance. There is usually a bonus on the spread for taking out life insurance with the bank. By transferring this insurance or taking it out from scratch with another company, the spread may increase by a few tenths and the monthly instalment by a few euros. However, the savings you make with new life insurance are usually much greater. In fact, the monthly premium should be much lower and you'll win in the end. Finally, before making a decision, seek professional and specialised advice from an insurance broker. Find out more here: