Do I need to duplicate life and multi-risk insurance when transferring a home loan credit?

Need to clarify issues related to credits and insurances? The agents at Poupança no Minuto offer free credit mediation and insurance mediation services. Contact us now or understand better what happens to insurances if you transfer the mortgage loan afterward.

Mortgage credit: Must have associated life insurance and comprehensive insurance.

At the time of hiring a home loan, banks require you to take out two insurances: one life insurance and one multi-risk insurance. It is a mandatory step for the financing to be approved, so that the bank is protected in case an unexpected situation arises.

So, life insurance protects the banking institution in case the credit holder suffers an illness or accident that prevents them from earning income and repaying the loan installments. At the same time, multi-risk insurance protects the property in case of any accidents. Depending on the coverage, it may also cover the contents of the property.

You can search for the most suitable insurance company.

As a rule, banks ask you to hire insurance from their associated insurer, but you are not required to do so. You can look for the insurance company that makes the most sense for you and offers you the best proposal in terms of cost-benefit. In this case, the bank may increase the credit spread in return, but, when doing the math, it often pays off considering how much you save on insurance with an entity outside the bank.

But considering the following situation: you already have the home loan contracted and, at the time you went through the process, you took out insurance with the associated insurer. And now you want to transfer the home loan. The question arises: What should be done with the insurance? Is it possible to cancel the policy early in these cases? Let's see next.

I want to transfer my mortgage credit, what should I do with the insurance?

If, due to lack of knowledge or considering it advantageous, when you hired your mortgage credit you opted for the insurance company associated with the bank to hire the required insurance policies (life and multi-risk), there may be some questions when wanting to transfer the housing credit. Once the insurance policies have been contracted with the bank's partner insurance company, what happens to the insurance when transferring the credit?  

What often happens is that when transferring credit, customers forget about the insurance and take out new policies at the bank's insurance company to which they transferred, suggested by the bank (for better financing conditions). This leaves other insurances active and ends up with duplicate insurance, unnecessarily.

How to prevent duplicate insurance policies?

So, what should be done to prevent this situation? As a rule, these insurance policies can only be canceled in two cases: by not renewing the policy, which involves waiting until the next renewal date, or in the sale of the property.  

In this case, since the property is not being sold, but the debt is being settled in the first bank, you must be aware that it is a matter you will have to deal with directly.

Therefore, to prevent the hiring of duplicate insurance, you can: Suggest to the new bank to keep the current insurance policies you have, if you are satisfied. Or, if you consider it worthwhile, proceed with transferring the insurance to the new insurer. It's true, just as you transfer the mortgage, you can also change the insurance to a new entity.

Although it does not happen automatically, that is, when transferring the credit, the insurance is not transferred also, it is possible to request the transfer from the current insurer.

To ensure no step is missed, you can turn to a credit intermediary/insurance mediator like Poupança no Minuto to guide you through the processes of transferring both housing credit and insurance.

Ensure you achieve the highest possible savings on your monthly expenses and payments, with the help of a free and personalized service. Contact Poupança no Minuto, save yourself from bureaucracies, challenges, and save on your budget!