You have the right to transfer the life insurance linked to your mortgage—and doing so could save you hundreds or even thousands of euros a year. Many Portuguese families continue to pay for the insurance they purchased from the bank at the time of closing, unaware that the law allows them to switch insurers at any time while maintaining (or even improving) the required coverage.
In this article, we explain how the process works, what the law says, and how R2 Seguros handles all the paperwork for you—free of charge.
Is It Mandatory to Keep the Bank's Life Insurance?
No. According to Decree-Law No. 222/2009, no banking institution may prohibit customers from purchasing life insurance from a third party or transferring the life insurance associated with a mortgage. Customers are free to choose their insurer, provided they meet the minimum requirements set by the bank.
In addition, Decree-Law 72/2008 (Art. 97) establishes that the insured person has the right to switch life insurance policies. In other words, transferring a life insurance policy is not an exception—it is a right enshrined in Portuguese law.
Could the Bank Increase the Spread If I Transfer My Insurance?
This is the most common question—and the answer is in the law. According to Decree-Law 74-A/2017 (Art. 11, para. 3), the spread cannot be increased, unless the initial contract includes a discount associated with the purchase of life insurance or optional ancillary sales.
Furthermore: the bank is legally prohibited from charging fees for reviewing or renegotiating a loan agreement (Circular Letter No. 61/2008/DSB and Decree-Law 74-A/2017, Art. 25, para. 1). The Bank of Portugal provides detailed information on consumers’ rights regarding mortgage loans.
At R2 Seguros, we review the loan’s public deed and the supplementary document on a case-by-case basis to provide you with the best possible advice before moving forward.
How to Transfer Life Insurance in 3 Steps
The process is simpler than you might think. Our team takes care of everything:
1. Review of the documentation
We reviewed the deed and the supplemental document to the deed for your mortgage to confirm the terms agreed upon with the bank and identify any associated incentives.
2. Presentation of simulations
We compared quotes from various insurance companies—Allianz, APRIL, MetLife, Real Vida, and others—and presented the scenarios that meet (or exceed) the requirements set by your bank.
3. Cancellation and Replacement of the Policy
We handle the entire process of canceling your previous policy and replacing it through your bank. At no cost to you —we take care of all the paperwork involved in transferring your life insurance, free of charge.
How Much Can I Save by Switching Life Insurance Policies?
You can save up to 60% per year, depending on your age, the outstanding balance, and the bank where you purchased the insurance. Two real-life examples from R2 customers:
- Example A — insured principal of €1,256,000: The customer used to pay €13,200 per year at the bank and now pays €5,400 per year. Savings of €7,800 per year (60%).
- Example B — insured amount of €64,000: The customer used to pay €600 per year and now pays €431 per year. Savings of €169 per year (28%).
And best of all: in most cases, the new policies offer more comprehensive coverage than those offered by the bank.
Frequently Asked Questions
Do I need to get a medical exam?
It depends. Each insurance company assesses the risk based on age and the outstanding balance, and may request additional information or medical exams. All costs associated with these exams are covered by the insurance company—never by the customer.
Do the proposed insurance policies meet the bank's requirements?
Yes. All insurance policies offered by R2 to secure a mortgage meet the requirements set by banks—and in many cases, they provide even broader coverage. The Insurance and Pension Funds Supervisory Authority (ASF) regulates and supervises all insurance activities in Portugal.
What is actuarial age?
It is the insured person’s age plus 1 year, if more than 6 months have passed since their last birthday. This is the figure that insurers use to calculate the premium—so the sooner you transfer the policy, the better.
Contact R2 Seguros — No Obligation
Transferring your life insurance to cover your mortgage could be the most financially rewarding decision you make this year. R2 Seguros reviews your situation, compares options on the market, and handles all the paperwork—free of charge and with complete independence.
Request a free quote using our contact form, or learn more about our insurance solutions for you and your family.