Mortgage Life Insurance: Tips for Expats

Buying a Home in Portugal?

Moving to Portugal and buying a home is an exciting step — the sunshine, the lifestyle, the culture. But then comes the paperwork.

If you're applying for a mortgage (crédito habitação) in Portugal, you’ve probably heard that life insurance is “mandatory.” But what does that mean exactly? And are you really required to use the bank's insurance?

Here’s what many expats wish they had known before signing their mortgage contract.

Yes, Life Insurance Is (Usually) Required

Most Portuguese banks require life insurance when granting a mortgage. This insurance is meant to cover the outstanding loan in case of death (and often also permanent disability). It’s a way to protect both the bank and your family.

But here’s the key point: you’re not required to take the insurance with the bank itself.

The Bank Might Not Tell You Everything

Many expats report feeling pressured by banks to sign their life insurance on the spot — often with little time to compare options or understand the fine print. It's not uncommon to hear:

“I thought I had no choice.”

“They said my mortgage would be rejected if I didn’t use their insurance.”

In reality, Portuguese law allows you to choose your own life insurance provider, even if that slightly increases the interest rate (spread). In most cases, you still save a lot of money in the long run by switching to an independent insurer.

You Could Be Overpaying — Without Realising It

It’s not unusual for expats to discover (sometimes years later) that they are paying double or even triple what they could be paying for the same coverage.

Let’s say you’re paying €80/month with the bank. An independent policy might cost only €30–€40/month — with identical or better protection.

Doing the math can be eye-opening. Even if the bank increases your interest rate slightly, the savings on insurance usually more than compensate.

Yes, the Process Can Be Bureaucratic

Portugal is known for its paperwork. That’s no secret.

Between medical questionnaires, documents in Portuguese, and local tax numbers (NIFs), the process might feel overwhelming. Especially if you’re used to more digital or streamlined systems in your home country.

But don’t worry, It’s Confusing for Us Too!

The complexity of Portuguese bureaucracy isn’t directed specifically at foreigners. The processes can be confusing, and communication isn’t always as clear or direct as it should be — even for locals. So if things seem slow or unclear, don’t take it personally. It’s part of how the system works here, and that’s exactly why having local guidance can make everything easier.

Medical Conditions? Don’t Panic

If you have a pre-existing condition, or you’re older than 50, you might worry about being declined or excluded. While each case is assessed individually, you’d be surprised at how flexible the Portuguese insurance market can be — if you know where to look.

Not all insurers treat every condition the same way. There’s often room for negotiation.

Planning to Move Again? Here's What Happens to the Policy

Another common question: “What happens to the insurance if I move away from Portugal or sell the property?”

That depends on the type of policy and how it's structured. In most cases:

• If the mortgage is paid off, the policy ends.

• If the property is sold, the policy can be cancelled.

• if you choose to switch banks, the policy may be transferred.

• If you stay in the EU, some policies can even remain valid — or be adapted.

It’s all about asking the right questions before you sign.

A Local Partner Who Speaks Your Language

As a certified life insurance mediator and mortgage consultant, I help expats:

• Understand your options clearly, including with or without the bank

• Compare available policies and choose the one that fits your needs

• Negotiate with the bank and calculate whether changing the policy (even with a spread increase) is worth it

• Navigate the medical questionnaire step by step — no stress, no confusion

• Handle all the paperwork for you, from simulation to policy issuance

• Ensure your family is properly protected with the right coverage

• Save money not just now, but over the full term of your mortgage

• Overcome obstacles and find practical solutions when things get stuck

• Be there for you even after the policy is in place — including support with claims if needed

And I’ll explain every step in clear English — no legal jargon, no pressure. Just honest, personalised guidance from someone who knows the system from the inside

Need Help or a Quick Simulation?

Whether you already signed your mortgage or you're still exploring options, feel free to reach out for a free consultation or insurance simulation. Sometimes a 10-minute chat can save you thousands of euros.

GET FREE QUOTE

Contact me here, by email, phone or whatsapp.

I’m based in Santarém — working with expats across Portugal

Mortgage Life Insurance: Tips for Expats