What is Life Insurance Loans?

This is a question that many people ask when purchasing a loan. Is it mandatory or not to take out insurance when hiring a loan?

In most banks, when you take out a loan, it includes the hiring of a series of insurance policies. When they grant us a loan, they force us to take out home or life insurance with themselves. This is in many banks, essential to grant us such a loan.

Well, this was the case until relatively recently, because the government banned related operations in its day when you take out a loan. This means that banks cannot make the granting of loans to the contracting of other products contingent.

So answering the initial question


No, it is not mandatory to take out insurance with the bank when you buy a loan. Quite different is the case of mortgage loans, which require you to take out damage or home insurance, but this is another issue that we are not going to deal with today.

By law and according to current European legal regulations, it is not mandatory to take out home or life insurance when you buy a loan, but in practice most banks ask for it as an indispensable requirement. Now, the financial institution cannot make related offers, but they can be combined, so it is in your hands to assess whether it is more profitable to hire insurance or an insurer with them.

If your bank forces you to take out insurance with him, we recommend that you review the advantages of hiring him at an insurer since the conditions of your contract will vary. We also recommend that you take your time doing your calculations and consult with the bank itself and with a notary if necessary.

If, despite this, they don’t let you, you can write a letter to the insurer defender with a copy for you, just like filing a claim with the Bank of Spain.

The subsidized loan is one in which the interest rate is reduced by contracting other products offered by the bank, in this case it is usually life insurance or payment protection insurance . In the case of not contracting the associated product, this will mean that the interest rate of the loan will increase. It will be the client who takes stock of whether he is more interested in contracting life insurance with an annual payment that can vary from $ 200-400 per year depending on your profile or waive the bonus on the interest rate.

Can I request a personal loan without collateral or life insurance?

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Yes, you can take out a personal loan without guarantee or life insurance , since it is not a mandatory requirement and many entities already offer this option. Generally, the banks will have enough to domicile the payroll in their entity and thus have proof that you can assume this debt.

If you also have a history in the bank , they are points in your favor to grant you the loan. For example, there are loans aimed at those clients who have a minimum net income of $ 35,000 per year and have their income domiciled in the corresponding bank with an age of at least 6 months. In this specific case of a personal loan without guarantee or life insurance, it is referenced to the Euribor plus a 7% differential. You can ask for $ 20,000 of maximum financing to be returned in 7 years.

The important thing when requesting a personal loan


Is that the bank positively assess your creditworthiness when conducting the study. In other words, that your work situation be your only guarantee. In this way, it will not be necessary to purchase life insurance or payment protection insurance. Therefore, a good option is to select the loan that best suits your profile in terms of amount and term.

If with all that we have told you, you still have doubts about it, contact us. In Financial Loans we advise you on what you need. Our team of professionals will manage your case and advise you on what you need to find together the best solution for your project.

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