Zurich Vida Colectivo — Collective Employee Insurance by Convenio

What this policy is and why it is often compulsory

Group life insurance is taken out by the company for its employees. In Spain this is
usually not a voluntary decision but a requirement of the sector agreement: in
many industries — hospitality, construction, retail, transport — the collective agreement
expressly obliges the employer to provide staff with cover for death and disability.
A company without it is in breach of the agreement, and normally finds out at the worst
possible moment: during an inspection, or after an accident.

Legally this policy instruments the employer’s pension commitments to its
staff and falls under the first additional provision of Royal Legislative Decree 1/2002
and Royal Decree 1588/1999. That is not a formality: it is precisely why the policy
satisfies the collective agreement rather than being merely “insurance for
employees”.

How it works in practice

The policy is unnamed. It does not insure individually listed people but everyone
on the Social Security Relación Nominal de Trabajadores. No adhesion forms are
signed: the company itself adds employees. A new hire is covered by virtue of being
registered, a leaver drops out, and joiners and leavers are reconciled once a year.

Nor is the sum insured chosen freely: it is set by the collective agreement the company
reports.

What the company gains

• Compliance with the collective agreement — the main and most common reason.
• A tax advantage: the premium is deductible from corporation tax.
• Lower cost than insuring people individually for the same sum.
• The owner can be insured too, alongside the employed staff.
• Simple administration: no individual questionnaires, no separate contracts.
• And what cannot be measured in money: the employee sees that the company thought about
  their family. That changes the conversation both at hiring and at parting.

How the cover is put together

The guarantees do not combine arbitrarily. Death is the main, compulsory
guarantee: without it there is no policy. Partial permanent incapacity requires
absolute permanent incapacity to be taken as well. Severe disability requires death cover
or, failing that, accidental absolute incapacity. The full list and the rules are in the
table.

It is also worth knowing that most guarantees carry additional sums for accidents
at work, road accidents treated as work-related, and occupational illness. Those are
exactly the ones that cover the hardest outcomes for a family.

Two branches within the family

Vida Convenio and Vida Pyme, for small and medium companies whose aim is to
comply with the agreement. Vida Riesgo Colectivo TAR, annually renewable, tailored
to the company; for teaching centres this option can also insure the completion of pupils’
studies.

What it looks like in numbers

A real example from our own book, without the company name. A restaurant in Tenerife,
hospitality sector agreement, sum insured under that agreement €15,000 per employee.
Eleven people on the payroll. The policy costs about €547 a year including
taxes — roughly €50 a year per employee.

But that is not “the price of the product”. The rate depends heavily on the activity: recent quotes have brought the same cover in at €19 a year per person. The realistic benchmark is from €20 a year per employee, and we give the exact figure once we know your agreement and your line of business.

That is the price of complying with the agreement. A standalone individual policy for
€15,000 would cost more for a single person.

What it does not cover

Suicide within the first year from the employee’s inclusion in the policy.
Intentionally caused losses, except while saving people or property. People under 16 cannot
be insured, nor can anyone already recognised as permanently incapacitated or in the process
of being so. Death cover ends at the close of the policy year in which the employee turns
70; complementary guarantees, at 67.

A separate case: an employee on sick leave when the policy is taken out. They are
covered only for death and absolute permanent incapacity by accident, and for no more
than three months from inception. Once back at work they gain all the guarantees after a
simple health questionnaire. This has to be asked before signing, not after.

What your own agreement requires

In Spain the sector collective agreement often expressly obliges the employer to insure their staff. But the requirements differ: some call for life cover, others only for accident-at-work cover, and the amount may be fixed or calculated from salary. A policy “in general” does not satisfy the obligation — it has to be the one your agreement names.

Three sectors, three different requirements. A fourth will have its own. And agreements vary not only by activity but by province: Santa Cruz de Tenerife and Las Palmas each have their own, as does every province on the mainland.

Write to us and we will look yours up

Tell us your company’s province and line of business: we will find your agreement, read the relevant article and tell you whether a policy is compulsory, which one exactly, for what amount, and which employees it must cover. It is free and commits you to nothing.

Please enable JavaScript in your browser to complete this form.

Your name *

Email *

Phone *

Province *

Your company’s line of business *

Number of employees

Anything else we should know

GDPR *

• I consent to this site storing the information I provide so that it can respond to my enquiry.

Find out which policies are compulsory

You can see in advance what such a document looks like. Here is the full Santa Cruz de Tenerife hospitality agreement in its official publication: the article in question is on page 43.

Download the hospitality agreement (PDF, 47 pages)

One caveat we think it fair to state: agreements are revised and the amounts change. That is why we check the wording in force in the official gazette on the day you ask, rather than the internet repositories, where outdated texts tend to linger.