“It is a common practice for credit institutions to require, as a condition for granting housing credit, the contracting of life insurance that guarantees the payment of the amount due in the event of death or disability of the borrower,” introduces the body chaired by Margarida. Corrêa de Aguiar in the information note that links to the training content.

To clear up doubts, the sector's Supervisory Authority (ASF) has released a new episode of the series "Vamos Falar Seguro," in which Lucélia Fernandes from the ASF's Department of Behavioral Supervision answers a set of questions about Life insurance associated with credit to the housing.

In the new episode “I bought a house. What about Life Insurance?” the specific rules to which these contracts must comply are discussed. Firstly, contracting Life insurance does not constitute a legal obligation, but rather a safeguard for both parties, a credit institution - bank or other - that guarantees the reimbursement of the credit, while the bank customer is protected from effects of a possible foreclosure of the mortgage, with loss of the home.

The ASF official stresses that the law establishes specific conditions for this insurance. One of the rules is that the value of the insured capital must always be equal to the amount owed to the bank (identity rule), and the insurance premium must always be adjusted accordingly. That is, as the loan installments are paid and the outstanding principal decreases, the premium charged for the insurance will also decrease. But not always, because as the insured person ages, the calculated premium tends to get worse.

Another legal rule stipulates that the credit institution's customer can always choose the insurer where he wants to take out the insurance and the bank cannot make the granting of credit depend on the acceptance of the insurer that recommends the customer.

These and other issues, such as switching from Life insurance to another insurer during the term of the loan, obligations that bind borrowers and the event of death, are aspects explained in detail in the ASF digital support. The video can be seen here.

The Insurance and Pension Funds Supervisory Authority says that in the coming weeks it will make available the episodes “I'm going to take out insurance. What information should I provide the insurer?” and “Practical aspects of housing insurance”.

The “Vamos Falar Seguro” project is a financial education program that focuses on the development and production of digital content, with the aim of supporting consumers in understanding the products and services of the insurance sector and pension funds.

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