8.4.2.5. Dependency insurance

It is worth distinguishing:

1. Private Dependency Insurance

   The taxable amount may be reduced by premiums paid to private insurance policies that exclusively cover the risk of severe dependency or high dependency, in accordance with the provisions of the Law on the Promotion of Personal Autonomy and Care for Persons in Dependency Situation.

   Similarly, people who have a direct or collateral relationship with the taxpayer up to the third degree inclusive, or due to their spouse, or persons caring for the taxpayer under the guardianship or fostering regime, may reduce the premiums on their taxable base paid to these private insurance policies, taking into account the reduction limit provided for in the Act.

   Limit of the reduction set

   The total of the reductions made by all the people who pay premiums in favour of the same taxpayer, including those of the taxpayer themselves, cannot exceed 8,000 euros per year.

   The insurance contract must meet the following requirements:

   1. The taxpayer must be the policyholder, insured person and beneficiary. However, in the event of death, you may generate the right to benefits under the terms provided for in Legislative Royal Decree 1/2002, which approves the Revised Text of the Pension Plans and Funds Regulation Act.
   2. These insurance contracts must have to offer an interest guarantee and use actuarial techniques.

2. Group insurance.

   With effect from one January 2013, pension commitments undertaken by companies, including benefits, may be implemented be included, through collective dependency insurance contracts, in which the policyholder will only include the company and the condition of insured person and beneficiary will correspond to the worker. The premiums paid by the company under these insurance contracts and charged to the worker will have a reduction limit of 5,000 euros per year, both of which are independent.

   These premiums will not be subject to Inheritance and Donations Tax.