Costs & fees
Is life insurance required to get a mortgage in the UAE?
Yes, life insurance is generally mandatory for a UAE mortgage. It ensures the outstanding loan is paid off if you die during the term, protecting both your family and the bank. Cost is typically 0.4-0.8% of the loan amount per year, either through a bank group policy or your own approved policy.
Why it's required
A mortgage is a long-term obligation, often 15-25 years, and life insurance protects your family from inheriting the debt if you pass away before the loan is repaid. From the bank's side, it also secures the loan against the risk of the borrower's death — which is why it's a standard condition across UAE lenders.
- Typically costs around 0.4-0.8% of the outstanding loan per year
- Often available as a bank group policy, added to your monthly instalment
- Some banks also accept a suitable individual policy from an external insurer, subject to their approval
- Coverage generally reduces over time in line with your outstanding balance (decreasing term assurance)
Bank group cover vs. external policy: indicative comparison
On a AED 1,500,000 loan, here's how the two routes typically compare in the early years, before your outstanding balance has reduced much:
| Option | Typical annual premium | Notes |
|---|---|---|
| Bank group scheme | AED 6,000-12,000 (0.4-0.8%) | Simple, added to instalment, minimal underwriting |
| External individual policy | Often lower for younger, healthy applicants | Requires medical underwriting and bank sign-off |
Bank group cover vs. your own policy
Bank group policies are convenient — the premium is simply added to your monthly payment, with minimal paperwork. An independent policy can sometimes be cheaper, particularly if you're younger or in good health, but requires the bank's sign-off that coverage and terms are acceptable, and you'll need to manage the premium payments and renewal yourself.
What happens if a claim is made
If you pass away during the mortgage term with valid cover in place, the insurer pays out to clear the outstanding loan balance directly, so your family keeps the property without inheriting the debt. This is why banks treat the policy as a condition of the loan rather than an optional add-on — it protects the collateral as much as it protects your dependants.
How it fits into your total cost
Life insurance sits alongside property insurance as a mandatory recurring cost on top of your mortgage instalment. Factor both into your monthly budget using the mortgage calculator, and see the full fee breakdown for everything else to expect.
Run the numbers on your own case
Free Lenddoo tools and guides related to this article.
Last reviewed 6 July 2026
