Life and income protection

It is for anyone thinking about, planning or carrying out a move to Spain. You will know whether you need life or income cover, how mortgage-linked policies work, how much to buy, and how a claim works.

Start with "Do you need life insurance (seguro de vida) in Spain?". It helps you decide whether to buy cover at all and explains the main types of policy. From there, take the articles that match your situation:

• Buying a home with a loan: "Life insurance tied to your mortgage and outside alternatives".
• Working out an amount and who gets the money: "How much life cover your family needs and naming beneficiaries".
• Filling in an application: "Health questions in life insurance and the risk of getting them wrong".
• Worried about illness or loss of income: "Accident, disability and income protection beyond Spanish social security".
• Employed in Spain: "Checking life and accident cover from your employer (convenio colectivo)".
• Dealing with a policy after a death: "Claiming life insurance as a beneficiary in Spain".

Social security benefits, succession tax filing, private long-term care and death practicalities are covered elsewhere.

Key rules

• Mortgage life cover: A bank cannot make life insurance compulsory to give you a mortgage, but it may offer an interest bonus for it and must accept an equivalent policy from another insurer.
• Insurer reaction: If you answer health questions wrongly, the insurer has one month from learning of it to cancel the policy, and can refuse to pay if you acted with intent or gross negligence.
• Registry wait: You can request the death-cover insurance certificate and the last wills certificate once 15 working days have passed since the death.
• Insurer payment: The insurer must pay within 40 days of receiving the claim notice, and a beneficiary has 5 years to claim on a life policy.
• Not compulsory: A bank cannot force you to take life insurance to get a mortgage.
• Bonus: A bank may offer a lower rate for life insurance, and must explain it in the offer sheet.

Life and income protection: the whole process, step by step

• Decide whether you need life cover (Do you need life insurance (seguro de vida) in Spain?): before you sign any policy, especially if someone depends on your income or you have debts

• Check what state benefits would pay if you fell ill, and what your employer already covers (Accident, disability and income protection beyond Spanish social security; Checking life and accident cover from your employer): before buying any private cover; a new arrival often lacks the 180 days of contributions needed for sick pay

• Work out how much cover you need and name your beneficiaries (How much life cover your family needs and naming beneficiaries): before you choose a policy

• Compare the bank's life policy and bonus with an outside policy (Life insurance tied to your mortgage and outside alternatives): before you sign the mortgage; the bank cannot make life insurance compulsory and must accept an equivalent policy

• Answer the health questions fully and accurately (Health questions in life insurance and the risk of getting them wrong): when you apply; if the insurer finds a wrong answer, it has one month from learning of it to cancel

• Replace or cancel the bank's policy if a better one exists: at renewal, with written notice to the insurer normally at least 1 month before, and tell the bank; compare the new cost with any lost interest bonus

• Ask the registry for the death-cover insurance certificate (Documents a beneficiary needs to claim a life policy): once 15 working days have passed since the death

• Send the claim notice to the insurer (Claiming life insurance as a beneficiary in Spain): the insurer must pay within 40 days of receiving it, and you have 5 years to claim

Documents you may need

Identity and residence

• Your ID — Claiming life insurance as a beneficiary in Spain

Income and work

• The product information document of any savings or unit-linked policy — Do you need life insurance (seguro de vida) in Spain?
• Your employment contract — Checking life and accident cover from your employer (convenio colectivo)

The home and the lease

• Your policy contract — Do you need life insurance (seguro de vida) in Spain?, Accident, disability and income protection beyond Spanish social security
• The life insurance policy contract — How much life cover your family needs and naming beneficiaries

Payments and receipts

• The policy and the latest premium receipt — Claiming life insurance as a beneficiary in Spain

Guarantees

• A certificate of insurance — Checking life and accident cover from your employer (convenio colectivo)

Other documents

• Your will — Claiming life insurance as a beneficiary in Spain, How much life cover your family needs and naming beneficiaries
• Original death certificate — Claiming life insurance as a beneficiary in Spain
• A copy of the health questionnaire the insurer gave — Health questions in life insurance and the risk of getting them wrong
• The will or declaration of heirs — Claiming life insurance as a beneficiary in Spain

Each article lists the other documents it asks for, where you need them.

Life and income protection: questions that cross several articles

Is life insurance compulsory to get a mortgage in Spain?

No, a bank cannot make life insurance compulsory to give you a mortgage. It may offer an interest bonus for it and must accept an equivalent policy from another insurer.

Can I cancel the bank's life policy after signing the mortgage?

Yes, you can cancel or replace it at renewal, but the bank may then remove the interest bonus. If your new policy is equivalent, the bank should keep the bonus. Read Life insurance tied to your mortgage and outside alternatives, then Do you need life insurance (seguro de vida) in Spain?

Which household situations make life cover worthwhile?

Life cover is worthwhile when others depend on your income, such as children or a partner on a single income, or when you have debts like a mortgage. It matters less if you have no dependants and no debts. Read Do you need life insurance (seguro de vida) in Spain? and then How much life cover your family needs and naming beneficiaries.

How do I work out how much life cover to buy?

Add up debts, income replacement for the years your dependants need it, children's costs and funeral costs, then subtract savings, existing cover and survivors' pensions. The gap is the amount to insure. Read How much life cover your family needs and naming beneficiaries, and check your employer's cover in Checking life and accident cover from your employer (convenio colectivo).