In practical terms, the main purpose of this policy is to prevent the family from facing the house payment alone during a delicate moment when overall income may suddenly drop due to death or disability.

Mandatory insurance

Many consumers blindly believe the law requires life insurance when applying for a housing loan. The legal reality is quite different. Life insurance is not legally mandatory, but rather a strong commercial requirement by banks to protect the loaned capital. Banks require the policy to ensure the house debt is paid in case of misfortune to the holder.

The crucial difference between IAD and ITP

The most common trap in the insurance market involves the type of coverage contracted.

A Invalidez Absoluta e Definitiva (IAD) is the cheapest option but also the least protective, requiring the insured to be in a vegetative state and dependent on others for the insurer to pay the debt, that is, 100% disability.

On the other hand, Total and Permanent Disability (ITP) is slightly more expensive but protects the client if they lose the ability to practice their profession, offering a much more suitable level of protection for clinical reality, covering disability from 60%.

To quickly understand where the risk and protection difference lies, the best way is to place the two coverages side by side.

Feature	Absolute and Permanent Disability	Total and Permanent Disability
Disability level	Requires 100% total third-party dependency.	Activated frequently from sixty percent disability.
Personal autonomy	Needs help to eat, dress, and handle basic hygiene.	The insured maintains their independence in daily and personal routines.
Professional capacity	Impossibility to exercise any type of existing profession	Inability to continue practicing the usual and regular profession.
Practical example	Vegetative state or total body paralysis with no mobility.	Use of a wheelchair but with mental autonomy to work in another area.
Monthly price	Cheapest option due to the extreme difficulty in activating the policy.	Slightly more expensive solution but offers realistic protection in active life.

The golden rule for saving

The bank may automatically suggest its own policy, but Portuguese law allows you to purchase life insurance from another specialized insurer. As long as the new policy meets the capital and coverage requirements of the original bank, changing companies often reduces the monthly payment by half and eases the family budget.

How to compare and decide

Never look only at the final price of the simulation. The correct and safe way to decide is to always confirm the type of disability offered in the proposal. Additionally, check if the policy includes high-value complementary coverages, such as specific protection against serious and oncological diseases.

Need help? Our insurance mediation experts help us get the proposal that best suits your needs and budget, ensuring your family's protection. Do a simulation and receive a personalized proposal.

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