A:

For non-residents life assurance is always optional in Spain, however, in some cases it will provide added security, which is of course welcomed by banks. Indeed some banks may attempt to entice the client by offering lower interest rates on the mortgage if additional banking products such as life insurance, buildings and contents insurance and credit cards etc are also purchased.

This may initially sound like an attractive option, but these extra products may not necessarily be the best available on the market and may suit the bank more than the borrower. In all cases good advice from a reputable mortgage broker is essential as in some cases over the longer-term the total costs of the mortgage with these extras may result in a higher net cost.

For non-residents intending to move to Spain, thus becoming permanent Spanish residents, life assurance should be considered. In the event of the death of one partner the insurance can be used to repay the outstanding mortgage.

For those intending to remain resident in the UK, life assurance may be obtained in the UK. Something to bear in mind is that in Spain the proceeds from a life assurance policy held in either Spain or the UK cannot be assigned to a Spanish mortgage.