Mortgage credit: Do I have to accept the life insurance that the bank imposes on me?

Just need to hire life insurance or a home loan and don't want to read everything? Contact us now, to help you directly. If you want to know the answer to the most frequently asked questions on this topic: keep reading the article.

Am I obligated to contract life insurance with a home loan?

When hiring a home loan, banks require you to also take out life insurance. But the most common question that arises is: By law, are you required to take out this insurance when contracting the credit?

The answer is no. By law, it is not mandatory to have life insurance to be able to apply for a mortgage. But is it possible to take out a mortgage without life insurance? Also no. Banks do not allow you to proceed with the mortgage if you are not protected by this insurance.

In other words, the correct word would be: insurance is required, not mandatory. And why? Because it is a way for banks to protect themselves from the risk of default by customers, in case of an accident that incapacitates the borrower from earning income and paying off the loan, or even in the event of death.

If a client has a life insurance with coverage for Absolute and Permanent Disability (IAD), Total and Permanent Disability (ITP), and death, if one of these events occurs and the insurance is triggered, the bank receives from the insurer the outstanding loan amount. Thus, the loan is settled and the family is freed from this burden.

Do I have to get insurance at the bank's insurance company?

As a rule, in the proposal that banks initially suggest, it is proposed that the life insurance required for the home loan be done with the insurance company associated with the bank. This is because, if you choose to take out insurance within the bank, the bank entity can offer better conditions on the loan, such as a bonus on the spread rate (one of the loan rates).

However, you should know that, by law, you are not required to purchase insurance from the bank's insurer. In this case, you cannot even be required to do so.  

According to the legislation, the client can seek the life insurance solution that best suits them. Therefore, they can choose the insurer that presents the best conditions.

However, be aware that the bank may change the conditions of the home loan proposal if you choose a life insurance from another insurer.  

In this case, you should always do the math: even if the bank penalizes the spread value, increasing the monthly installment you will have to pay for the credit, the money you will save by hiring life insurance from a different insurer may compensate.

Therefore, always evaluate the most compensatory scenario before making any decision. Consider factors such as savings, but also your needs and preferences, as well as those of the family unit, if applicable.

If you need help on this topic, Poupança no Minuto can accompany your process in a personalized and free way. Don't worry about bothering: we are here for that. We make the hiring of insurance and loans as simple as possible.