8.4.2.5. Dependency insurance

It is worth distinguishing:

1. Private Dependency Insurance

   Premiums paid for private insurance that exclusively cover the risk of severe dependency or great dependency may reduce the tax base in accordance with the provisions of the Law for the Promotion of Personal Autonomy and Care for People in a Situation of Dependency.

   Likewise, people who have a direct or collateral family relationship with the taxpayer up to the third degree inclusive, or through their spouse, or those people who have the taxpayer in their care under a guardianship or foster care regime, may reduce by the premiums paid for these private insurance policies will be added to the tax base, taking into account the reduction limit provided for in the Law.

   Reduction set limit

   The set of reductions made by all people who pay premiums for the same taxpayer, including those of the taxpayer himself, may not exceed 8,000 euros per year.

   The insurance contract must meet the following requirements:

   1. The taxpayer must be the policyholder, insured 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 Law on the Regulation of Pension Plans and Funds.
   2. These insurance contracts will have to offer an interest guarantee and use actuarial techniques.

2. Group insurance.

   With effect from January 1, 2013, the pension commitments assumed by companies, including the benefits accrued, may be implemented through collective dependency insurance contracts, in which the policyholder will exclusively include the company and the condition of insured and beneficiary will correspond to the worker. The premiums paid by the company under these insurance contracts and charged to the worker will have their own and independent reduction limit of 5,000 euros per year.

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