Life Insurance

Hi All,

We are just finalising our mortgage with a Spanish bank and they are telling us at least one of us has to take their life insurance and take their building insurance as well.  We had been under the impression that as long as we have adequate life cover in the UK we do not need the bank's life insurance.  Has anyone else experienced this problem?  We obviously do not want to upset the bank in the last stages of our mortgage application!

Any advice greatly appreciated

Afternoon

This seems to be common practice by the banks, and is often a condition of the mortage. We had the same issue with Bancaja last year, and after several previous mortgage applications with other lenders had been rejected we were keen not to upset our potential saviours  -  so smiled nicely and went along with it  (despite the fact the mortgage was small and we already had plenty of cover)

On the upside once you have paid for the 1st year you dont have to re-new with them for the 2nd !!

Good luck !!

Mark

We didnt have to take life cover out with CAM, however, we have just approached them about switching to lower rates and they have said we would need to take cover out to benefit from lower interest rates! 

Hi there,

Normally when signing your mortgages, most of the bank in Spain will be asking to have with them both home insurance and life insurance. You can sign both things with them for the first year and see how it goes. After that, you can obviously change it to other companies.

Home insurance: This is mandatory in Spain if you have a mortgage with a bank. You need to have a home insurance. To change it, you will need to communicate the bank at least two months in advance in writing that you are going to change to another company. You need to tell the new insurance company that the benefit of the "poliza" is your bank and that it will cover at least the amount you owe to the bank. It means that if the house got destroy, the insurance company will pay the bank for the mortgage.

Life insurance: IT IS NOT MANDATORY. It is up to you if you want to keep it. Normally the bank will tell you something different, but if you mention, you will contact and complain to the Bank of Spain (Spanish entity that control the banks) if they keep charging the life insurance, then they might stop charging for it. They know is not mandatory, but they will try to do their best to get as much as they can from you. Banks are banks!

I read in the news yesterday that the complainings with the Bank of Spain has increases by 30% this year. I believe so!!!!!

Regards

Maria N557