Life Insurance Glossary Spain
Essential Spanish life insurance terms explained in plain English. Understand your policy and protect your family with confidence.
Terms by category
Policy Types
(5 terms)Seguro de vida
Life insurance
Insurance that pays a lump sum to beneficiaries when the policyholder dies. In Spain, life insurance is often linked to mortgages but also used for family protection, inheritance planning, and income replacement.
Why it matters for expats:
Life insurance provides financial security for your family if you die unexpectedly. As an expat in Spain, it's particularly important if your family depends on your income or you have a Spanish mortgage.
Seguro de vida temporal
Term life insurance
Life insurance for a fixed period (typically 10-30 years). If you die during the term, beneficiaries receive the payout. If you survive the term, coverage ends with no payout. Lower premiums than whole life.
Why it matters for expats:
Ideal for specific needs—protecting young children until adulthood, covering a mortgage term, or income replacement during working years. Affordable way to get significant coverage.
Seguro de vida entera
Whole life insurance
Permanent life insurance that covers you for your entire life, not just a term. Premiums are higher but coverage never expires. May accumulate cash value over time.
Why it matters for expats:
Guarantees a payout whenever you die—useful for inheritance planning or leaving a legacy. The cash value component can provide financial flexibility later in life.
Seguro de vida hipotecario
Mortgage life insurance
Life insurance linked to your mortgage—if you die, the policy pays off the remaining mortgage balance. Coverage decreases as you pay down the mortgage. Often required by Spanish banks.
Why it matters for expats:
Spanish banks typically require this when you take a mortgage. It protects your family from losing the home. Compare bank offers with independent policies—banks often charge more.
Seguro de vida ahorro
Investment/savings life insurance
Life insurance combined with savings or investment component. Part of your premium goes to life coverage; part accumulates value. At maturity or death, beneficiaries receive guaranteed amount plus accumulated value.
Why it matters for expats:
Combines protection with savings. Popular in Spain for retirement planning. However, returns may be lower than separate investment products. Understand both the insurance and investment aspects.
Financial Terms
(5 terms)Capital asegurado
Sum assured/coverage amount
The amount paid to beneficiaries when you die. Should cover your family's needs—mortgage, debts, income replacement, education costs. Typically €100,000-€500,000+ depending on circumstances.
Why it matters for expats:
Calculate based on what your family would need: pay off mortgage, replace income for X years, cover children's education. Underinsuring leaves your family vulnerable; overinsuring wastes premium.
Prima de vida
Life insurance premium
The cost of your life insurance, paid monthly or annually. Depends on age, health, smoking status, coverage amount, and term. Younger, healthier people pay less. Premiums typically range from €20-€100+/month.
Why it matters for expats:
Get life insurance young when premiums are lowest. Health issues later can mean higher costs or declined coverage. Compare quotes—prices vary significantly between insurers for identical coverage.
Prima nivelada
Level premium
Premium that stays the same throughout the policy term. Higher initially than increasing premiums but provides cost certainty. Most common for term life insurance.
Why it matters for expats:
Level premiums make budgeting predictable. You know exactly what you'll pay for 20 years. Compare to increasing premiums which start lower but may become expensive.
Capital decreciente
Decreasing coverage
Coverage amount that reduces over time, matching decreasing liabilities like mortgages. As you pay down the mortgage, the coverage (and premium) decreases proportionally.
Why it matters for expats:
For mortgage protection, decreasing coverage makes sense—you only insure what you owe. Cheaper than level coverage but provides less if you die late in the term.
Valor de rescate
Cash/surrender value
Amount you can receive if you cancel a whole life or savings policy before death. Builds over time. Early cancellation may result in loss; mature policies have significant value.
Why it matters for expats:
Whole life policies accumulate value you can access. However, canceling loses your coverage. Consider carefully before surrendering—sometimes policy loans are a better option.
Coverage Types
(5 terms)Cobertura por fallecimiento
Death benefit coverage
The core life insurance coverage—payment to beneficiaries when the insured person dies. May be a lump sum or, in some policies, paid as regular income to beneficiaries.
Why it matters for expats:
This is why you buy life insurance. Ensure the amount truly covers your family's needs. Consider inflation—€200,000 today won't have the same value in 20 years.
Invalidez permanente
Permanent disability coverage
Coverage that pays if you become permanently disabled and can't work—may be total (can't do any job) or partial (can't do your job). Often added to life insurance as a rider.
Why it matters for expats:
Disability is more likely than death during working years. This coverage replaces income if you can't work. Consider adding to your life insurance for comprehensive protection.
Incapacidad temporal
Temporary disability/sick pay
Coverage providing income if you're temporarily unable to work due to illness or injury. Pays a percentage of salary during recovery. Bridge between sick leave and permanent disability.
Why it matters for expats:
If you're self-employed or have limited sick pay, this coverage maintains income during recovery. Standard employee benefits may not fully cover long illness periods.
Enfermedades graves
Critical illness coverage
Lump sum payment if diagnosed with specified serious illnesses—cancer, heart attack, stroke, organ failure. Payment is made while alive, not at death. Helps with treatment costs and lifestyle adjustments.
Why it matters for expats:
Critical illness can mean inability to work, expensive treatments, and lifestyle changes. This coverage provides funds when you need them most—while dealing with serious illness.
Doble indemnización
Double indemnity (accidental death)
Doubles the death benefit if death results from an accident rather than illness. Common add-on to life policies. Relatively cheap addition given lower probability of accidental death.
Why it matters for expats:
Provides extra protection at low cost. If your work or lifestyle involves accident risk, this rider increases family protection. Consider based on your specific circumstances.
Application & Claims
(5 terms)Cuestionario de salud
Health questionnaire
Form you complete when applying for life insurance, declaring health history, lifestyle, and family medical history. Answers affect premium and coverage. Honesty is essential—false declarations can void claims.
Why it matters for expats:
Answer truthfully. Undisclosed conditions discovered at claim time can result in denied payment. Minor issues rarely prevent coverage—they may just affect premium slightly.
Reconocimiento médico
Medical examination
Physical exam sometimes required for high coverage amounts or older applicants. May include blood tests, ECG, and general health assessment. Insurer arranges and pays for the examination.
Why it matters for expats:
Don't fear the medical exam—it's standard for larger policies. Good health means better rates. If issues are found, you'll know about them. Some policies don't require exams for lower coverage.
Período de carencia vida
Life insurance waiting period
Time after policy start when certain deaths aren't covered, typically suicide exclusion for 1-2 years. Natural death and accidents are usually covered immediately after policy activation.
Why it matters for expats:
Most life insurance covers death from day one, except suicide exclusions. Understand any waiting periods for specific causes. Don't delay coverage thinking there's a general waiting period.
Suscripción
Underwriting
Process where the insurer evaluates your application—reviewing health questionnaire, medical exams, and risk factors to decide whether to offer coverage and at what premium.
Why it matters for expats:
Underwriting determines if you're covered and what you pay. Be patient and honest. Complex health histories may take longer. Simplified underwriting is faster but may have higher premiums.
Designación de beneficiario
Beneficiary designation
Formal naming of who receives the life insurance payout. Can be specific people (spouse, children), trusts, or institutions. Should be kept updated after life changes (marriage, divorce, births).
Why it matters for expats:
Review beneficiaries regularly. Outdated designations can cause problems—ex-spouses receiving payouts, deceased beneficiaries causing delays. Life insurance bypasses wills, so designations matter.
People & Roles
(3 terms)Asegurado vida
Insured person (life)
Person whose life is insured—their death triggers the payout. Can be the same as the policyholder or different (e.g., parent takes policy on child). Their health determines premium.
Why it matters for expats:
Usually you insure yourself, but you can insure others with insurable interest (spouse, business partner). The insured person's health and age determine policy terms.
Tomador vida
Policyholder (life insurance)
Person who owns the policy—pays premiums, can make changes, cancel coverage. May be same as insured person or different. Has administrative control over the policy.
Why it matters for expats:
The tomador controls the policy even if someone else is insured. In business insurance, the company may be tomador insuring key employees. Understand who has control.
Beneficiario vida
Life insurance beneficiary
Person(s) or entity receiving the death benefit. Can name primary and contingent beneficiaries. Percentages can be split among multiple beneficiaries. Should be specific and current.
Why it matters for expats:
Name beneficiaries explicitly—'my spouse' can cause confusion after divorce. Review after major life events. Consider contingent beneficiaries if primary beneficiary dies first.
Documents
(4 terms)Póliza de vida
Life insurance policy document
The contract between you and the insurer—details coverage, exclusions, premium, beneficiaries, and terms. Read carefully before signing. Keep in safe place accessible to family.
Why it matters for expats:
This document is your contract. Understand what's covered and excluded. Store securely but ensure your beneficiaries know it exists and where to find it.
Condiciones generales
General terms and conditions
Standard terms applying to all policies of that type—definitions, claim procedures, exclusions. Same for everyone who buys that product. The legal framework of your coverage.
Why it matters for expats:
Don't skip reading these. Understanding exclusions and claim procedures prevents surprises. Ask questions before signing if anything is unclear.
Condiciones particulares
Particular/specific conditions
Terms specific to your policy—your coverage amount, premium, beneficiaries, any special conditions based on your health or circumstances. The personalized part of your contract.
Why it matters for expats:
Check that particulares match what you requested. Errors in beneficiaries, coverage amounts, or personal details should be corrected immediately.
Certificado de cobertura
Coverage certificate
Document proving your life insurance coverage—may be required by banks for mortgages or by others as proof of insurance. Shows coverage amount, term, and key details.
Why it matters for expats:
Banks require proof of life insurance for mortgages. Keep certificates accessible. Request from your insurer when needed for mortgage or other purposes.
Ready to get life insurance in Spain?
Now that you understand the terminology, let us find you the right coverage for your family. We explain everything in English and compare options from multiple insurers.
Get Life Insurance QuotesCommon questions
What's the difference between term and whole life insurance?
Term life covers you for a set period (e.g., 20 years) with lower premiums—if you die during the term, beneficiaries receive the payout. Whole life covers you forever with higher premiums but may build cash value. Term is usually best for family protection; whole life for legacy planning.
Do Spanish banks require life insurance for mortgages?
Banks typically require mortgage life insurance, but you don't have to use their policy. You're legally entitled to choose any insurer—often saving 30-50% compared to bank policies. We can help you find competitive alternatives.
What medical information do I need to disclose?
You must disclose your full health history—current conditions, medications, past surgeries, family medical history. Be completely honest; false declarations can void claims. Minor issues rarely prevent coverage—they may just affect premium.
How much life insurance coverage do I need?
Calculate based on: outstanding debts (mortgage), income replacement (5-10 years of salary), education costs, final expenses. A common rule is 10x annual income, but your specific situation determines the right amount.
Can I name multiple beneficiaries?
Yes—you can name primary and contingent beneficiaries, splitting percentages as you wish. Review beneficiaries regularly, especially after marriage, divorce, or births. Beneficiary designations override wills for life insurance.
What's the difference between death benefit and critical illness cover?
Death benefit pays when you die; critical illness pays while you're alive if diagnosed with specified serious illnesses (cancer, heart attack, stroke). Critical illness provides funds when you need them most—for treatment and lifestyle adjustments.
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