Am I required to keep insurance with the bank where I got the loan?

Can I choose another insurer?

Yes. The bank can require insurance linked to the loan. But it must accept a policy from any insurer, if the cover is equivalent to what it offers.

For life insurance, you can choose the insurer you prefer. You can also use a life policy you already have, if it meets the bank's minimum requirements.

Can I switch after signing?

Yes. During the loan, you can take out a new life policy to replace the first one. If you move the loan to another bank, you can keep the same life policy.

Before you cancel the old policy, check with the bank that the new one meets the contract requirements.

Required insurance counts in the APR. A cheaper policy lowers the total cost of the loan.

So where is the risk?

In insurance that lowered your spread. The bank may have offered a lower spread if you took its insurance. These are optional linked products, known as bundling.

If you drop that insurance, the bank may raise the spread, under the contract. It can only do so within one year of you dropping it.

The ESIS shows the effect of these products, in the additional obligations and in part B. The bank must give you a simulation of your repayment with and without each product.

An example with the sums

You owe €150,000 over 25 years, at 3%. Your repayment is about €711. With another insurer, your life policy costs €25 less a month.

If the bank raises the spread by 0.2 points, your repayment becomes about €727, €16 more. You still save about €9 a month. It pays off.

If the spread rises by 0.5 points, your repayment becomes about €751, €40 more. You lose about €15 a month. It does not pay off. These are example figures.

How do I switch?

• Read in your contract and ESIS what happens to the spread if you drop the insurance.
• Ask other insurers for quotes, with the bank's minimum cover.
• Add up the saving on the premium and any rise in your repayment.
• Only then cancel the old policy.

Where FINOVA helps

We compare your insurance with other insurers and work out the spread with you. See insurance optimisation. In the mortgage repayment calculator you can see the effect of another spread.

See also Which insurance policies are mandatory in a mortgage loan?

Sources

• Banco de Portugal — How to enter into home loan agreements
• Banco de Portugal — Is it mandatory to have an account with the lender and take out life insurance? (in Portuguese)
• Banco de Portugal — Decree-Law No 222/2009 on life insurance linked to home loans (in Portuguese)
• Banco de Portugal — Lost in your home loan documents? How to read them (in Portuguese)
• Banco de Portugal — Interest rates in home loans

Sources checked on 22 September 2026.