Everything You Need to Know About Dos and Don'ts of Life Insurance in the UAE

By Sakshi Srivastava - 28 Mar 2022 Last Updated: 17 May 2022
Everything You Need to Know About Dos and Don'ts of Life Insurance in the UAE

When seeking to make most of our major purchasing choices in life, we consider our actions and the consequences of those actions. Similarly, when purchasing life insurance in the UAE, it is critical to understand the various dos and don'ts. Once you've decided to financially secure your dear ones' futures in the event of an unfortunate situation, you must choose the best available option for doing so.

 When it comes to looking for life insurance policies, there are numerous options available, but it is critical to select the one that is best for you in order to maintain your family's lifestyle while also staying within your budget. This blog will go on to discuss the dos and don'ts of life Insurance in the UAE.

Dos of Life Insurance in the UAE

The following are some pointers to keep in mind while buying for life insurance in the UAE:

Examine the Three Basic Alternatives

In general, there are three types of life insurance available in the UAE:

Term insurance: 

This type of life insurance pays out a lump sum to the beneficiaries if the policyholder dies during the policy's term. Premiums are paid for a set period, and the cost of term life insurance is typically lower than the cost of whole life insurance.

Whole Life Insurance: 

This type of life insurance policy pays out the sum assured upon the policyholder's death. Whole life insurance premiums are frequently higher. Premium payments are typically made for a period of up to 95 years.

Decreasing Term: 

This type of life insurance policy pays out a lump sum if the policyholder dies during the policy's term. As the lump sum amount decreases as the policy matures, the decreasing term life insurance price is generally lower than the other types. The premium is paid for a set period of time.

Consider Connecting Your Life Insurance and Mortgage.

You may be considering life insurance to ensure that your family can continue to make mortgage payments in the event of your early demise. 

In this case, it is best to match your life insurance policy to the type of mortgage you have:

  • If you have a fixed-rate mortgage, you should consider decreasing term life insurance. This is because, like the balance due on your mortgage payments, the payout on this policy decreases as the policy matures.

  • If you have an interest-only mortgage with interest payments that do not reduce the mortgage amount over time, term life insurance is a good option. Because the payout on this policy does not diminish over time, it can serve as a wage earner in the event of an early demise.

Examine Your Assured Sum

It's possible that you'll be eligible for your employer's 'death in service' benefit if you die while on the job. This contribution amount is typically up to four times your salary.

If you qualify for this amount, you can make the necessary changes to your coverage requirements. This will help you save money because your coverage requirements will be reduced.

Protect Your Policy

You may have heard of the 'waiver of premium' add-on benefit. It is a clause that can be created to your base policy that protects you in the event that you are unable to uphold  your premium payments in the future. It could be as a result of illness, sickness, or an accident. It is a good idea to keep an eye out for this coverage and how it can be added to your policy.

Choose between Joint and Single Insurance Coverage

If you have a partner, you have a choice between a joint and a single life insurance policy.The cost of joint life insurance is frequently lower. The catch, however, is that they only pay out the sum assured once. As a result, if one of the partners dies unexpectedly, the other is left with a payout but no future coverage. If the surviving partner is in his or her senior years in this scenario, this could be costly for him or her.

Don'ts of Life Insurance in the UAE

The following are things to avoid when choosing a life insurance policy in the UAE:

Don't Cut Corners while Determining your Coverage Requirements

The term coverage refers to the amount of money you need from your life insurance policy to cover everything your family will need to maintain their current standard of living. Policy seekers frequently underestimate the amount of policy cover required, but it is crucially significant and should not be underestimated. While determining the amount of coverage you need, it is often a good idea to consult with a financial advisor.

Quit Smoking

Any type of smoking, whether vaping, e-cigarettes, cigars, or cigarettes, can result in a doubling of your insurance premium charges. It is best for you to quit smoking for at least 12 months before presenting yourself to insurance providers as a non-smoker.

Don't Forget About the Taxman

Many market providers of life insurance policies allow you to write your policy 'in trust.' This means that after your death, your life insurance policy is not considered a part of your estate, and thus no Inheritance Tax is levied on the policy. It is essential to take advice from a professional when evaluating this option because there are frequently many legal complexities involved that are extremely delicate in nature when it comes to the person with whom you are required to be legally involved. It is best to seek advice from an expert whom you trust and are familiar with.

Remember to Review your Policy at Least Once a Year.

People frequently overlook this, despite how obvious it is. However, if you are an expat who wants to stay on top and in complete control of your personal finances, it is essential to review all of your financial products on an annual basis. Life insurance policies are no exception. The main reason for this is that you will be required to precisely keep updating your insurance provider regarding the most recent relevant changes in your lifestyle and living circumstances so that your policy remains valid and you do not face any problems in the future during claim settlement.


With the dos and don'ts placed out, it is essential to mention that life insurance policies should not be viewed in isolation. Life insurance policies can be combined with a wide range of other financial products on the market and carefully planned to your advantage.

Contacting a professional like Dhanguard, who works at the intersection of financial markets and policies, can be extremely beneficial when putting together a comprehensive life insurance package for yourself.

Investment is made simple and hassle-free with Dhanguard in Dubai, UAE. We provide you various investment options like Index Fund, Gold, Mutual Fund, Stocks, SIPs, Bonds, life insurance, Sukuks with the minimum possible trouble including paperwork & payments.

By Sakshi Srivastava

28-Mar, 2022

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