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What are you protecting?
If illness or an accident changes your ability to work, your mortgage payments still need to be made. Understanding your insurance before you need it helps you prepare.
A lender may require life insurance as security for the loan. Payment for a covered claim depends on the insured amount, beneficiaries and policy terms. Insurance does not cover every form of incapacity. See the Bank of Portugal guidance on guarantees.
IAD and ITP are Portuguese disability cover terms. Death cover and other benefits should be considered separately.
IAD: absolute and definitive disability
IAD generally involves permanent inability to carry out paid work together with needing another person’s assistance for essential daily activities, such as eating or dressing. The precise definition is set out in the policy.
It is a more restrictive form of cover. An impairment affecting work may not meet IAD requirements. The Real Vida explanation of disability cover illustrates the distinction.
Ask which daily activities are specified and how dependency is assessed. An attractive starting premium is only one part of the decision.
ITP: total and permanent disability
ITP can cover permanent incapacity affecting professional activity without the dependency on others associated with IAD. Clinical and occupational criteria vary between policies.
Some products offer ITP thresholds of 55% or 60%. The 2025 MetLife Vida Completa product sheet gives an example; these percentages are not a universal rule.
Reaching a percentage does not automatically trigger payment. Check the policy definition, occupational criteria, medical assessment requirements and exclusions.
Compare cover before comparing prices
| Consideration | IAD | ITP |
|---|---|---|
| Dependency | Usually requires assistance with essential daily activities. | Usually does not require this dependency. |
| Criteria | Absolute and definitive disability as defined in the policy. | Total and permanent disability with contractual clinical and occupational criteria. |
| Price | Request a quotation for your circumstances. | Compare the cost of additional cover. |
| Decision | Understand what is excluded. | Check where protection is broader. |
This table is a guide. Compare quotations with the same insured amount, insured people and term, then examine differences in cover and premiums.
Seven questions to ask before choosing
- What disability is covered? Request the full definition.
- When does each benefit end? Compare age limits with the mortgage term.
- What exclusions and waiting periods apply? Clarify relevant pre-existing conditions, occupation and activities.
- How will premiums change? Request a projection beyond the first month.
- How is the insured amount updated? Compare it with the outstanding loan.
- How are joint borrowers covered? Confirm the amount per person and beneficiaries.
- What evidence is required for a claim? Ask who assesses disability and how to apply.
Answer the insurer’s questions accurately. Request written clarification of unclear clauses from the insurer or an authorised insurance distributor.
Could changing insurer save money?
You can compare alternatives and replace the policy subject to the loan’s insurance requirements. Bank of Portugal information on mortgage insurance addresses choosing an insurer and considering the effect of replacement on the loan.
Compare the combined cost. A cheaper premium may not produce a saving if changing insurance means losing a mortgage spread discount. Ask your lender to confirm the terms and provide an updated calculation.
Illustrative example: saving €15 a month on insurance while paying €20 more on the mortgage makes the total €5 higher. Even where a saving exists, check that cover remains suitable.
Before cancelling the existing policy, confirm acceptance of the new insurance, its start date, final terms and the lender’s acceptance of the guarantee. Plan the transition to avoid a gap in cover.
Which option suits you?
Start with your household, budget and the risks you want covered. A policy should be affordable and understood. A good price matters when you know what you are buying.
Casa Ideal® helps you organise questions about mortgages and associated costs. Discuss the insurance terms and suitability with the insurer or an authorised insurance distributor.
Let’s talk about your mortgage
Read Buying a home: emotion or reason? and plan acquisition costs with our IMT and Stamp Duty calculator.
Frequently asked questions
Does 55% ITP pay automatically?
No. The threshold is one criterion. Other policy conditions must be met and the required evidence provided.
Does the FINE replace reading the policy?
No. The FINE, Portugal’s European Standardised Information Sheet, helps you assess the mortgage. Read the insurance pre-contractual information and general, special and individual terms too.
Should I choose by monthly premium alone?
Compare future premiums, insured amounts, age limits, exclusions and any effect on mortgage costs.
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