Life Insurance: A Must for UAE Homebuyers
Why Mortgage Buyers Need Life Insurance in the UAE
The real estate market in the United Arab Emirates (UAE), particularly in Dubai, has shown continuous growth in recent years, with a dynamic increase in demand for off-plan property purchases. This trend has not only meant substantial growth for developers but has also sparked increased interest in life insurance products, especially among those purchasing property with a mortgage.
Why is life insurance important for mortgage property buyers?
Industry experts say that life insurance, particularly term insurance, is an essential tool for property buyers taking out a mortgage. This insurance serves two primary purposes:
1. Family financial protection: In the event of unforeseen circumstances, life insurance can cover the outstanding mortgage debt, thereby protecting the family from losing the property.
2. Lender protection: Life insurance provides an additional layer of protection for lenders, ensuring that the loan will be repaid regardless of changes in the borrower's life situation.
Real estate market growth and insurance demand
In November, Dubai's real estate market set a new record with 12,543 transactions, an 18% increase compared to the same period last year. The total sales value reached 30.5 billion dirhams. Off-plan property sales continued to dominate the market, accounting for 60% of all transactions and showing a 35% annual growth, amounting to 15.8 billion dirhams.
This strong demand increases interest in mortgages, underlining the necessity for buyers to consider life insurance. Off-plan property purchases often involve significant financial burdens, making financial security particularly important.
Insurance benefits for UAE buyers
1. Cost-effectiveness: Life insurance can assure financial stability for the property buyer and their family at relatively low monthly premiums.
2. Flexible coverage: Term life insurance policies are often customizable, allowing them to align perfectly with the duration and amount of the mortgage.
3. Security amid rising markets: With rising property prices, life insurance provides protection for those forced to take on substantial loans due to higher costs.
How to choose life insurance?
In the UAE, numerous financial institutions and insurers offer term life insurance for mortgage buyers. When selecting the right insurance, consider:
a. The insurance duration, ideally matching the mortgage term.
b. The sum, which should cover the outstanding mortgage debt.
c. Prices and details of insurance services to find the best value-for-money solution.
Conclusion
The momentum in Dubai's and the UAE's real estate market creates excellent opportunities for off-plan purchases but also necessitates consideration of the risks associated with mortgages. Life insurance ensures financial stability not only for buyers but also for their families and lenders, contributing to the sustainable growth of the market. A well-chosen life insurance policy provides not only security but also long-term peace of mind for buyers.
