Taking out life insurance in Portugal is simpler than it looks: we start by understanding what you need it for, set the sum insured and the term, choose the cover, you complete a health questionnaire and then you decide with the quotes in front of you. In this article I walk you through each step, exactly as I do with my clients, so you know what to expect from start to finish.

Step 1: work out what the policy is for

Before we talk about price, I always ask the same question: what do you want to protect? The answer shapes everything else.

Your family: making sure that, if something happens to you, your partner and children have money to keep the home, cover everyday costs and pay for education.
A Portuguese mortgage (crédito à habitação): making sure the bank is repaid and your family keeps the house. This is the most common reason, and it has its own rules, which I cover in a separate article.
Other debts or commitments: a personal loan, a business partner, a relative who depends on you.

Often the answer is “a bit of everything”. In that case, it can make sense to have one policy for the mortgage and a separate one for your family.

Step 2: set the sum insured and the term

The sum insured (capital seguro) is the amount the insurer pays if a covered event happens. For a mortgage, it usually follows the outstanding loan balance. To protect your family, we work out a sensible figure together: your debts, a few years of your income, expected costs for your children, minus the savings you already have.

The term should match the need. If your mortgage ends in 30 years, or your children will be independent in 20, that is the horizon. There is no point paying for cover you no longer need, nor being left without it while it still matters.

Step 3: choose the cover

A protection life policy (in Portugal often called “seguro de vida risco”) essentially includes:

Death: the core cover. It pays the sum insured to your beneficiaries if the insured person dies during the policy term.
Disability: it pays the sum insured if you suffer a serious, permanent disability. The two most common options are IAD (Invalidez Absoluta e Definitiva, broadly “absolute and permanent disability”) and ITP (Invalidez Total e Permanente, “total and permanent disability”). ITP is usually broader, and therefore more expensive.
Optional extras: some policies offer other options, such as a double payout for accidental death. It is worth checking whether you need them before adding them.

The exact definitions of disability vary between policies. It is one of the points I compare most carefully for you, because that is where the biggest differences lie.

Step 4: health questionnaire and possible medical tests

The insurer needs to understand the risk it is taking on. You will be asked to complete a questionnaire about your health and lifestyle (smoking, occupation, sports, illnesses, treatment).

I ask only one thing here: answer fully and accurately. Portuguese law requires you to disclose accurately everything relevant to the assessment of the risk. An omission or an inaccurate answer can, in the worst case, lead the insurer to refuse a claim just when your family needs it most. If you are unsure how to answer a question, ask me before you sign.

Depending on your age, the sum insured and your answers, the insurer may ask for medical tests or a report from your doctor. In most cases these tests are paid for by the insurer. The outcome may be standard acceptance, acceptance with a higher premium, exclusion of a specific condition or, less often, a decline.

There is also a legal protection worth knowing about: the “right to be forgotten” (direito ao esquecimento), which stops certain illnesses you have overcome from being taken into account for insurance linked to loans, within time limits set by law.

Step 5: compare quotes

As an independent Insurance Agent, I request quotes from several insurers and show them to you side by side. We do not look at price alone:

what each policy means by disability, and at what degree of incapacity it pays;
the exclusions (what is not covered);
whether the premium is level or increases with age;
the maximum age to which cover continues;
the acceptance terms that came out of the questionnaire.

Step 6: name your beneficiaries

Beneficiaries are the people who receive the sum insured. You can name specific people, such as your spouse or children, or use a generic wording such as “legal heirs” (herdeiros legais). With a mortgage, the bank is the first beneficiary up to the amount still owed. This choice deserves care and should be reviewed when your life changes.

Step 7: policy issue and ongoing support

Once accepted, the insurer issues the policy. Read the terms calmly: for an individual life policy, you generally have 30 days from receiving the policy to cancel without giving a reason (the “free cancellation” right, livre resolução).

My work continues after that. I review your cover with you when there are important changes, such as marriage, children, divorce, a new loan or a change of job, and I help your family if the policy ever needs to be claimed.

Frequently asked questions about life insurance in Portugal

Do I need medical tests to get life insurance?

Not always. It depends on your age, the sum insured and your answers to the health questionnaire. For lower sums and younger people, the questionnaire is often enough.

How long does it take to set up life insurance?

When no tests are required, it can be sorted in a few days. If the insurer asks for tests or medical reports, the process usually takes a few more weeks.

Can I buy my mortgage life insurance somewhere other than the bank?

Yes. You have the right to choose your insurer, as long as the policy meets the bank’s requirements. I explain this in detail in my article on mortgage life insurance.

Ready to start?

If you like, I will look at your situation with no obligation and handle the whole process with you: request your life insurance review here or contact me directly.

Sources

General information only. It does not replace reading your policy conditions or personalised advice.