Can I change the life insurance associated with my mortgage loan?
Did you know you can change your life insurance for home credit and save every month? You are not required to keep it at the bank where you took out the loan: Find out how to make the change, the advantages, and what you should consider.
How to save by transferring my mortgage life insurance?
Yes, it is possible to change the life insurance associated with the housing loan. Many people do not know, but they are not required to maintain the insurance they initially contracted with the bank where they took out the loan. In fact, changing it can bring significant financial advantages.
In this article, we explain how life insurance exchange works, what are the benefits, and what you should consider before making a change.
Is life insurance mandatory for housing credit?
Banks require life insurance as a condition to approve a housing loan. This insurance ensures that in case of death or disability of the loan holder, the debt to the bank will be paid off.
Although insurance is required, there is no law obligating to hire it with the bank where you requested the loan. However, many banks impose this insurance as part of the loan agreement, sometimes with high premiums.
So, transferring the life insurance linked to the home loan can bring financial benefits and greater flexibility, such as:
- < b> Significant Savings < /b>: Many insurers offer lower prices than banks' associated insurers, which can reduce the monthly premium.
- Best coverage: You can find insurance with better conditions, such as more comprehensive coverage for serious illnesses or disability.
- Flexible payment options: Some insurance companies allow different payment methods (monthly, quarterly, annually), while banks may have stricter rules.
Read more: How does home credit life insurance work?
How to transfer life insurance?
If you have a mortgage credit with associated life insurance and want to change insurers, follow these steps:
1: Compare offers from other insurance companies.
Before canceling your current insurance, research the market and request quotes from other insurance companies. You can ask for help from an insurance broker who will handle everything at no cost. In the proposals, evaluate:
- The prize (amount to pay for insurance)
- Coverages included (death, total and permanent disability, total and permanent disability);
- The conditions of the contract.
2: Confirm if the new insurance meets the bank's requirements
The bank requires that the life insurance has the minimum mandatory coverage to ensure the loan payment in case of any incident. Make sure the new policy meets these requirements.
3: Communicate to the bank the intention to transfer.
Send the bank the formal request for replacing the life insurance and present the proposal for the new insurance. The bank cannot refuse the change, as long as the new policy meets the requirements.
4: Cancel the old insurance
As soon as the bank accepts the change, formalize the cancellation of the previous insurance to avoid paying for two insurances at the same time.
Learn more about the topic: Mortgage credit: Can transferring life insurance help lower the installment?
Can the bank penalize my credit for changing the insurance?
Banks usually offer lower spreads to those who have life insurance with them. Therefore, when changing insurers, they may slightly increase the spread on the home loan.
However, even with this change, in most cases the savings on insurance greatly outweigh the increase in the spread. Before making the switch, calculate to ensure that the new option is more advantageous overall.
Transferring life insurance from a home loan, in most cases, brings financial benefits. The key is to research well, compare options, and ensure that the new insurance meets the bank's requirements.
To do so, you can ask for help from specialists who can assist you in making the calculations and analyzing all the conditions to ensure that with this change you have access to significant savings. This is because it is possible to save hundreds or even thousands of euros throughout the loan just by changing insurance companies.
Contact the insurance mediators of Poupança no Minuto who, at no cost, take care of all the bureaucratic part and communication with the insurers! Or simulate directly the new insurance, in this simulator: Poupança no Minuto