Life insurance in Portugal: Complete guide for expats

Life insurance is intended to offer financial security for people left behind when a policy holder dies. You may want a life insurance policy to make sure your partner or children get some money to help them after your death, or you might want comprehensive life insurance which will cover extras like critical illness or disability. In many cases, getting some basic life insurance cover is mandatory when taking a mortgage in Portugal, to ensure the loan can be serviced even in the case of death

As an expat your life insurance needs may look a little different to Portuguese citizens and permanent residents. Your decisions may be dictated by how long you plan to be in Portugal, and the situation your dependents are in during your stay. This guide walks through common Portuguese life insurance options so you can decide if one is right for you.

This guide will cover:

This guide is for information only and does not constitute advice. Different types of insurance are suitable for different individual needs. Get professional advice and support to choose the right policy for your unique situation.

What is life insurance?

Life insurance is insurance which provides a cash lump sum upon the death of a policy holder. Some policies also cover critical illness or disability which may prevent you from working or limit your life expectancy. Cover levels vary a  lot – the most basic policies may only cover the value of a mortgage, and may be required as a condition of mortgage approval in Portugal.

Depending on the policy selected, death benefits may allow you to guarantee that your loved ones will have the financial means to cover funeral costs, continue paying a mortgage, or to relocate to your home country if you’re in Portugal as an expat. 

How does life insurance work?

When you take out life insurance you’ll agree to pay fixed premiums – monthly, quarterly or annually – in return for cover based on your policy rules. This is usually in the form of a lump sum paid out to your nominated beneficiaries in the event of your death.

Life insurance in Portugal may be very comprehensive, or might be intended only to fulfil the conditions set out by a mortgage provider. In this case cover would be limited to repaying any outstanding home loan upon death.

Some brokers in Portugal also specialise in offering life insurance policies which are based in Luxembourg, which combine life insurance and investments. Providers like One Life, and other brokers working with high net worth individuals in Portugal may be of interest if this is the type of product you’re looking for.

Different types of life insurance are available in Portugal to meet the varied needs of customers – this guide walks through some which may be suited to the needs of expats to start your research on which policy is right for you.

Types of life insurance available in Portugal

As we’ve seen, getting life insurance in Portugal may be mandatory if you want to take a mortgage there to buy a property. This means that banks and insurers typically offer several different classes of life insurance, from the basic package which is predominantly related to covering mortgage costs, to enhanced packages which may also cover extra problems and conditions, including paying out a fixed sum regardless of having a mortgage to pay.

Some insurers also have additional package options which might cover older people specifically, for example. 

Coverage levels on all policies does vary a lot. Some, like the YOLO! packages from Activio Bank allow you to configure your cover to include specific payments and subsidies based on health conditions, or to increase cover upon life events such as getting married or having children.

Life insurance policies have their own names which vary by provider. Some you may come across include:

• Term Life Insurance (Seguro de Vida Temporário) – used for a fixed period only, for example, the life of a mortgage loan
• Whole Life Insurance (Seguro de Vida Inteira) – usually an enhanced insurance policy which you pay for the rest of your life to guarantee a pay out upon death
• Universal Life Insurance (Seguro de Vida Universal) – flexible policies such as the YOLO! packages from Activio Bank 
• Unit-Linked Life Insurance (Seguro de Vida Unit-Linked) – insurance policies which invest premiums in the hope of growing the pay out sum over time

Here’s a look at the core products you’ll usually find from different providers, side by side:

	Basic Life Insurance	Enhanced Insurance
Target market	Customers who require life insurance for a mortgage application	Customers looking to offer financial security for families or dependents
Pay out timing	Upon death	Upon death, or for some policies in the case of disability or critical illness
Pay out options	Lump sum or regular pay out	Lump sum or regular pay out
Cover length	Fixed term, may be related to mortgage length	Whole of life
Costs	Costs depend on different policy and pay out basis	Costs depend on different policy and pay out basis

This guide is for information only and does not constitute advice. Different types of insurance are suitable for different individual needs. Get professional advice and support to choose the right policy for your unique situation.

Basic life insurance (mortgage protection)

Banks and mortgage providers may make it mandatory to have life insurance to get a loan. As a result insurers offer policies which are specifically designed to meet the needs of mortgage providers – although some policies also exceed the minimum requirements and offer additional features which may be attractive to expats in Portugal.

Policy features may vary, but you might find that you pay premiums which reduce over time, and can receive a reduced pay out over time in return. This matches the progression on paying off your mortgage – as time goes on you would need a smaller pay out to cover the remaining loan balance. This type of policy may be more economical than taking a policy which has a flat pay out level.

Basic life insurance isn’t the right choice for everyone – but may be mandatory if you’re buying a property in Portugal. The fact you can select the term you want to be covered for may also be appealing to expats on short or medium term assignments in Portugal.

Basic Life Insurance pros	Basic Life Insurance cons
✅ Designed to meet or exceed mortgage provider minimum requirements ✅ Different policy and payout options depending on individual need ✅  Choose the term of cover you want – useful if you only need cover while on an expat assignment	❌ Adds cost to taking out a mortgage ❌ Premiums may depend on the insured value and the age and health of the policy holder

Enhanced life insurance

Enhanced life insurance goes under many different names but offers extra cover compared to the most basic insurance offered by most insurers. While basic packages might only pay out upon the death of the policy holder – and only to the amount needed to repay a mortgage – enhanced cover can include a lot more.

Some enhanced packages cover things like critical illness and disability. In this case you could receive a lump sum or ongoing payment if you’re unable to work. Or you might add in elements of subsidy which could help with health care costs if you fell seriously ill, or set your policy to change in the event of having a child or your life circumstances changing for example.

Generally, enhanced life insurance policies are more comprehensive than the basic mortgage cover, and allow for flexibility of cover options. This may appeal to expats in Portugal who want to insure against specific eventualities based on their own life situation.

Enhanced Life Insurance pros	Enhanced Life Insurance cons
✅ Cover can include critical illness, disability and other aspects ✅ Death benefit is paid regardless of when the policy holder dies, subject to maintaining premium payments ✅ Premiums set according to the cover level you require	❌ You must pay premiums for the rest of your life to leave a lump sum upon death ❌ Can be a costly policy overall

Life insurance requirements for expats in Portugal

Whether or not you can get life insurance coverage in Italy will depend on many factors, including your residency situation, age, health and the type of policy you need.

Common requirements include:

• Age 18 – 70 at application
• You must be a legal resident in Portugal
• You must have a Portuguese NIF (identification number)
• You must meet policy health rules

It’s common to need to give medical details to open a life insurance policy. You may need to complete a medical questionnaire, complete a medical interview or undergo health checks, depending on the situation. Your suitability for a policy, and the costs, may change based on your health situation. 

How much life insurance do you need?

The amount of life insurance you need depends on many factors. While the Portuguese government does offer some support when citizens and residents die, you and your family are likely to have additional needs.

Customers who want the most basic package to fulfil their mortgage lender requirements only will need to take out adequate cover to repay their mortgage in the event of death. Check the mortgage provider rules before you sign up to a policy.

If you’re looking for enhanced insurance beyond your mortgage costs you’ll need to consider what value lump sum you would want to pay out, based on the situation your loved ones would be in if you died. 

This is enormously varied. For example, perhaps your partner has stopped working to support your international move, and would need funds for day to day life, or maybe you’d like to leave extra to cover the costs of repatriation if your family would choose to move home if you were to die. 

When you arrange life insurance in Portugal it is almost always necessary to talk through your personal situation with a member of the insurance team to agree the cover and policy which may suit your needs. As part of this conversation, you might want to ask the broker how to calculate life insurance needs in your personal circumstances, so you’ll be confident you’re buying the right policy for you.

Life insurance costs and premiums in Portugal

Insurers calculate the premiums payable on a life insurance policy on an individual basis. Factors affecting premium costs include:

• Your age
• Your health
• How long you want the cover for
• The level of cover you need
• Whether you smoke

You will need to talk to an insurance broker to get a few quotes based on your unique information, to get a feel for the premium costs and options you’re likely to have.

Buying life insurance in Portugal as an expat

Buying life insurance in Portugal as an expat should not be complicated as long as you’re a legal resident and can provide all the documents and information the specific insurer requires. Here’s an outline of the usual process:

Step 1: Decide on the cover and policy type you require

Consider the cover level you need, and the policy type – basic mortgage over or enhanced life insurance, for example. Get professional advice if you’re not sure which policy is right for you.

Step 2: Shop around to generate quotes from different providers

Most insurers ask you to give them a call to get an indicative quote for premiums and costs. Or you can use a broker to get quotes for you, to decide the right policy for your family.

Step 3: Apply online, uploading any required documents

You can usually submit your application online, and will be asked to upload documents proving your identity, address and legal residence in Portugal. Depending on policy type you may also need to provide health, employment and other information and paperwork.

Step 4: Undergo medical checkups if needed

Some policies will accept your medical information without checkups – others require you to attend an in person appointment to verify your health.

Step 5: Receive your policy document and start paying premiums 

Once your policy is prepared you’ll be sent all the relevant paperwork to review and you can start to pay your premiums.

Employer-provided life insurance

Employer-provided life insurance is a benefit which may be available depending on the country in which your company is based – usually for employees at a management level and above. This provides for a pay out of a fixed lump sum, calculated in reference to your salary, if you were to die in service. Your beneficiaries may get a pay out of 3x your salary, for example, subject to specified terms and conditions. 

Ask your HR department if this is provided in your workplace.

International life insurance vs local coverage

Which is best from international life insurance vs local coverage depends on your situation.

If you already have a life insurance policy in your home country you will need to talk to your insurer to understand what happens when you move overseas.

If you’re looking for a new policy on arrival in Portugal, you’ll need to shop around with local providers to find a good fit for your needs. Brokers can be helpful here, allowing you to generate quotes from many companies with little upfront effort.

Customers who are looking for a policy which can remain open wherever in the world you live, will likely need to talk to a specialist broker and look for offshore insurers which have more flexible residency policies compared to major Portuguese insurers. In Portugal there are several brokers who specialise in Luxembourg based insurance policies, which can be helpful for international residents, and which are aimed at high net worth individuals primarily.

If you need to pay for life insurance premiums in your home country or in foreign currencies, consider using Wise to make your overseas transfers. Wise offers one off and recurring payments and uses the mid-market exchange rate with low fees, and offers transfers to 140+ countries globally. This can help ensure your recurring bills are paid seamlessly and without excess costs.

Life insurance beneficiaries and international considerations

If you’re an expat in Portugal you may want to name individuals in a different country to be your beneficiaries in the case you were to die and your policy pays out. This may or may not be possible, depending on the policy and the country involved.

You may need to take professional advice to check the policy you have selected is suitable for your specific situation. Some important questions to think about include:

• Is naming beneficiaries in different countries possible?
• What are the tax implications for international beneficiaries based on their residency?
• What is the payout procedure if your policy pays out to someone overseas?
• How does currency conversion work if there’s a cross border payment?

If you’ve received a payment which you need to move overseas, choosing a provider like Wise can help mitigate some of the concerns about managing money across currencies. You can send payments with the mid-market rate, or receive and hold payouts in 8+ currencies without needing to convert unnecessarily, in a Wise account.

Life insurance when moving countries

Life insurance providers set their own rules about policy eligibility, which may include requiring Portuguese residence. If you’re moving from Portugal to another country and have an active life insurance policy here, you’ll need to check with your insurer if you can maintain your policy from another country. If not, you may need to close it and open a new one once you relocate.

Tax implications of life insurance in Portugal

As tax matters can be complex – and get even more complicated when dealing with different countries – you will need to get professional advice about the potential tax implications of life insurance in Portugal in your situation.

Some life insurance policies in Portugal include an investment element which you may be able to cash in before the death of the policy holder. Any growth in value may be taxed. Depending on the policy you have and its intent, as well as your home country’s rules on taxation on insurance, you may find there are steps you can take to limit your tax exposure.

Life insurance and estate planning

You may find that death benefits paid from an insurance policy upon the death of the holder are exempt from income tax in Portugal. However, other taxes may still apply, including tax in your home country if you’re an expat in Portugal. This means that you’ll need to get tax advice on managing your own assets if you’re planning your own estate, including life insurance. 

Planning and management of international assets including insurance lump sums could involve large international transactions. If you need to move a large payment overseas, Wise could help, with high transfer limits (usually around 1m GBP or equivalent), transfer fees which get lower when you send over 20,000 GBP, the mid-market exchange rate and a dedicated customer support team for large transfers.

Common life insurance mistakes to avoid for expats

Before you decide on the policy for you, consider these common life insurance mistakes to avoid for expats:

• Choosing the wrong policy type for expat lifestyle – not all policies are right for people living overseas. Get professional advice when you choose
• Underinsuring – bear in mind that your dependents may have different needs while you’re living internationally, and you may want to raise your lump sum accordingly, to pay for relocation for example
• Underestimating currency costs – fluctuations in currency rates could mean you have not selected a policy which matches your needs 
• Failing to update beneficiaries after moves – make sure your insurer has your most up to date information at all times
• Letting coverage lapse during relocations – check if your policy is valid after a planned move, and make sure you continue with premiums if it is

Life insurance claims process

If a loved one dies and you need to submit a life insurance claim, you’ll first need to get in touch with the insurer to report their death. To make the process easier you may need to find the policy number, and you can check the additional information the insurer needs when you speak to their service team. 

Usually you will be asked to submit:

• A death certificate 
• Deceased individual’s will if relevant
• Beneficiary ID documents and proof of address
• Proof of account ownership for pay out

Other documents may also be needed depending on the policy and situation. Once a claim has been approved it will be paid out according to the policy type.

Getting professional advice in Portugal

Before you choose a life insurance policy in Portugal you’ll need to invest some time in research, including getting professional support from qualified individuals who understand your own needs and the Portuguese insurance market.

You’ll be able to get quotes and individual advice from insurance providers, or from brokers which work with many different insurers. You can also look for online or word of mouth recommendations of individual brokers, and compare the options available to you to decide which is the best fit.

Life insurance companies in Portugal

Ultimately, the best life insurance plan and company will vary depending on each person’s needs.

To start your research, here are some life insurance companies in Portugal you may want to look into:

• Generali
• Activio Bank
• Blacktower (specialist insurance for expats, aimed at high net worth individuals)
• Feather Insurance (broker)

Companies selected to represent providers with a broad range of policy options suited to varying customer needs

Conclusion

Life insurance can offer peace of mind that your loved ones will be protected if you were to die. It may also be mandatory if you’re buying a Portuguese property. 

Choosing the right policy as an expat might take a little research as you’ll need to get familiar with the options available, and also think about the cover you need in your own unique situation. This guide walks through some basics of the types of policy available – and you can also get professional advice through a broker to help you choose the right service for your needs.

If you’ve received a lump sum payment which you need to repatriate or convert to a different currency, remember you can make high value payments from Portugal, to 140+ countries, with Wise. Wise uses the mid-market rate with no markup to worry about, and  fee discounts on high value payments over 20,000 GBP. This helps with keeping costs low and making the process to transfer overseas simple, convenient and cheap.

FAQ Section

Is life insurance tax deductible?

Tax can be a complex area, so you’ll need to get professional advice based on your individual situation to understand if any element of your life insurance may be tax deductible in Portugal.

How much should life insurance cost?

Insurers calculate the premiums payable on a life insurance policy on an individual basis. Factors affecting premium costs include age, health, and level of cover. Talk to an insurance broker to get a few quotes based on your unique information, to get a feel for the premium costs and options you’re likely to have.

What is a life insurance beneficiary?

A life insurance beneficiary is the individual who receives a pay out upon the death of a life insurance policy holder.

What is the difference between term and permanent life insurance?

Term life insurance is usually only offered for a fixed period, while permanent or whole of life cover is meant to be held on an ongoing basis until the death of the policy holder.

How to get life insurance?

You can get life insurance from many banks and brokers. There are some which specialise in expat requirements which can be especially helpful, such as Generali.