Half of those who have insurance hired it because the bank forced them

About 21 million Spaniards have life insurance. From them, almost 10 million are linked to banking products, according to some studies. Most entities pressure their clients to contract additional products, such as insurance or even pension plans, when it comes to being able to sign a mortgage or take out a personal loan. A practice not without controversy.

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With interest rates at lows for years, banks have transformed their business and they have complemented it with the commercialization of other products such as life insurance. The problem comes when entities barely provide data either to offer the most appropriate or in terms of complete coverage information. Added to this is the added difficulty at the time of the claim, since on few occasions the management and execution of said contracts is offered from the bank. In fact, there are already several sentences in different provinces that have condemned entities for not executing the life insurance linked to a mortgage and continuing to pay the monthly payments.

Remember that the Insurance Distribution Law makes it clear that the granting of a loan cannot be linked or conditioned to the contracting of a policy. The illegality of the action is such that organisms such as the Bank of Spain o la CNMC, in addition to the employers of the sector, already promised a year ago more vigilance and commitment to avoid it. “The client must know that the law protects him and that he should not accept a series of financial products as a condition for obtaining a loan,” say insurance intermediaries. They consider that this practice is a “flagrant illegality”. “For a long time we mediators have detected abusive and illegal commercial practices in the sale of insurance by banks that go against the freedom of clients and competition, taking advantage of their dominant position,” they add.

What’s more, linked sale is not allowed when the insurance is the accessory product of a financial good or service that is the main one and is not subject to the regulations of the MIFID directives, the Mortgage Law and the directive on payment accounts. The Insurance Distribution Law states that when the General Directorate of Insurance and Pension Funds has evidence of the performance of practices that harm users private insurance may, by resolution, establish measures, including prohibition, in relation to the sale of insurance products together with auxiliary services or products other than insurance as part of a package or agreement.

What happens then when the bank does carry out these practices? In these situations, in case of doubt or abuse by the entity, it is more than advisable to consult with expert and independent lawyers. Regarding the recommendations for contracting and collecting life insurance, the lawyers point out that It is essential to understand the document in which the conditions appear, the IPID document that complements and summarizes the general conditions. In addition, the policyholder must be able to cancel the insurance, if necessary, since it is covered by article 83 of the Insurance Contract Law, during the first 30 days of life insurance, “without indicating the reasons and without any penalty “.

According to the lawyers, “the best option is to take out life insurance out of the bank to be able to negotiate, read and understand the possible exclusions. Banking insurance operators tend to limit themselves to sales, but the processing and advice during claims is actually part of the insurance distribution activity and hence they do not provide assistance, “they say. Another tip, in the case of life insurance, it would be leave designated beneficiaries and, if possible, with a will before a notary, which does not contradict the policy to avoid inconsistencies in the appointment of the heirs.

How to claim the insurance? Whether capital-intensive or not, it is necessary in most cases to put yourself in the hands of lawyers. “Almost always it is the relatives of the deceased who see the complications to know or get the conditions of the policy signed years before by the deceased person. When the Certificate of Insurance Contracts for death coverage is obtained, which is obtained thanks to the Registry that depends on the Ministry of Justice, a list of the existing contracts is obtained, but not the general or particular conditions, which is what really matters to the possible heirs to be able to solve doubts or to be able to collect if it were the case “, they point out.

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