Do You Need Life Insurance for a Mortgage?

Do you need life insurance for a mortgage in Dubai?

The short answer to the question: “Do you need life insurance for a mortgage?” in Dubai is yes, life insurance insurance is mandatory for any mortgage in the UAE.

Before understanding the importance of mortgage life insurance, let us understand the various factors that may impact your policy.

Bear in mind that several insurance providers may have additional recommendations when applying for a property mortgage, but only life insurance is a mandatory requirement.

While you evaluate different mortgage insurance policies, the insurance provider will also evaluate your case before suggesting potential covers. The factors impacting your insurance include:

• Age 

• Occupation 

• Medical history 

• Country of origin 

• Lifestyle (e.g. smoker or non-smoker) 

Can I Choose My Own Life Insurance Provider for a Mortgage in Dubai?

In most cases, banks in Dubai require borrowers to take out life insurance directly through them as part of the mortgage process. These in-house policies are usually bundled for convenience and issued by the bank’s preferred insurance partner.

While some borrowers inquire about the possibility of using external life insurance providers, often in search of lower premiums or more flexible terms, this option is not always available. Only a limited number of banks permit external life insurance, and even then, strict conditions may apply.

Although external providers may offer benefits such as portability (transferring your policy if you refinance or switch lenders), you should always check whether your chosen bank accepts this and what approval steps are involved.

Understanding the importance of life insurance for homeowners

Having understood the fundamentals of “Do you need life insurance for a mortgage in Dubai?”, let us proceed to the importance of owning a reliable mortgage life insurance policy. 

Whether you are a foreign national, a UAE resident, or an expat, it is critical to possess a mortgage insurance policy when getting a mortgage. The insurance policy can be considered as a safety net for your family members in case of your untimely passing. Having a mortgage life insurance policy will ensure that even with your passing, your family can obtain the property without the burden of repayments - as your mortgage loan will be paid off. 

In most cases, the cost of a mortgage insurance policy is charged every month - and separately from one’s loan installment. Bear in mind that if a married couple is opting for a mortgage insurance policy, wherein only one partner is working and holds the property and mortgage - the non-working partner does not need to obtain a separate policy. However, it is important to consult with insurance providers on what kind of coverage would be ideal for the couple. 

Be it a couple or a family, a mortgage insurance policy will provide immense relief to your family/spouse in an unexpected event. 

Impact of life insurance on real estate investment decisions

As long as you can qualify for a mortgage and life insurance, there is little stopping you from obtaining your dream home. 

Having both mortgage pre=approval and life insurance in place positions you to actively search for the perfect property and shows you as a credible potential buyer to sellers.

Obtaining the mortgage pre-approval as part of your property search will help you in several ways, including:

• Setting a suitable budget for your property. 

• Preparing your finances to ensure that they are in order, both for the upfront costs of buying the property, like the deposit and transfer costs, and the ongoing costs, like the monthly mortgage payment and insurance fee.

• You can immediately place an offer on a property you like without having to wait and undergo the process of obtaining pre-approval. This increases your chances of securing the property you want. 

Alternatives to life insurance for a mortgage

There is no alternative to a life insurance policy for your mortgage in Dubai. It is mandated by the UAE - making it a requirement for any mortgage in Dubai and any of the emirates.

Common misconceptions about life insurance and mortgages

Do you need life insurance for a mortgage in Dubai? Yes — but many buyers still have concerns or misconceptions about this requirement. Let’s address some of the most common myths surrounding mortgage life insurance in the UAE.

“Life insurance for a mortgage is too expensive.”
In reality, there is a wide range of policies available across Dubai and the UAE. Many are priced to suit different budgets, and monthly premiums are generally affordable, especially when compared to the value of the property being financed.

“I’m young and healthy — I don’t need life insurance yet.”
It’s a common belief, but not accurate. In fact, younger and healthier individuals usually benefit from significantly lower premiums. Life insurance at this stage is often inexpensive and offers long-term protection and peace of mind for you and your family.

“Life insurance is optional or can be added later.”
For mortgages in Dubai, life insurance is a mandatory requirement from the start of the loan. Without it, your mortgage cannot be finalised — so it’s important to factor it into your planning from day one.

Final Thoughts: Life Insurance for a Mortgage in Dubai

Life insurance is a mandatory requirement for obtaining a mortgage in Dubai, and understanding how it fits into the overall mortgage process is essential, whether you're buying your first apartment or investing in a luxury villa.

While some aspects of life insurance may seem complex at first, having the right guidance makes all the difference. From understanding bank-mandated insurance policies to preparing your documents for mortgage pre-approval, being informed at each step can significantly speed up and simplify your journey.

At Engel & Völkers, our experienced mortgage advisors are here to support you through every stage of the process — from choosing the right loan to fulfilling all bank requirements, including life insurance.

Speak to a mortgage advisor today to get pre-approved quickly and confidently begin your property search in Dubai.