What you need to know about mandatory life insurance for your UAE home loan

Life Insurance is compulsory when you take a mortgage in the UAE. Regardless of whether you know about it, you will pay for life insurance somehow when you secure a home loan in the UAE.

The life insurance policy will pay out your home loan in case of your untimely death so that your family can enjoy the property without having to worry about mortgage payments. 

For most banks it is charged month to month, separate to the loan. A few banks increment their interest rate to cover the month to month insurance premium and a few banks will make you pay the policy in advance.

In case of married couples, if the property and home loan is just for the name of the working partner; it isn’t mandatory for the non- working life partner to get life insurance yet most advisors suggested in any at least partial coverage. On the off chance that the partner is on the title a few banks demand all candidates of the advance being secured paying little mind to who is the income earner.

CRITICAL ILLNESS COVER (CIC)

Most life insurance advisors likewise suggest Critical Illness Cover (CIC) which will cover your mortgage installments for a while in the event that you are diagnosed to have a genuine ailment and can’t work. Critical Illness Cover (CIC) isn’t mandatory  in the UAE and can be costly on the off chance that you are past your twenties so most counselors prescribe enough CIC Insurance to cover the loan repayments for a couple of years to empower you to remain in the property while you recover or give you an opportunity to sell the property.

COST OF LIFE INSURANCE

Life Insurance premium installments are a progressing cost of mortgaged home ownership that should be figured inside your financial limit. Life insurance expenses are negligible for non-smokers younger than 40. However, costs can increment exponentially with your age, your wellbeing and the amount insured. Any previous ailments lawfully should be revealed to your life insurance advisor. If you fail to disclose them, reject your claim. Which means your family may not get the insurance payout when they need it most.

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