How to Take Loan Against Life Insurance Policy in UAE?
Many people wonder if they can take out a loan against life insurance policy in UAE. The concept of loan on a life policy is common in some countries where insurers allow policyholders to borrow against the cash value of their plans. However, in the UAE, the situation is slightly different.
35+ Critical Illnesses
Issuance
Coverage
4.6/5
34,867
ReviewsInsurance Partners
Trusted Customers
Policies Sold
Qualified Policybazaar expert will assist you Here, the availability of a loan against insurance policy depends on the type of plan you hold. The rules differ for term life insurance and whole of life policies.
Buy Best Life Insurance Plan in UAE
Some of the best Term Insurance quotes in UAE & Dubai are:
Loan Against Term Life Insurance for Mortgage Protection
If you are taking a mortgage loan in the UAE, most banks make it mandatory to purchase a term life insurance plan. This setup is also known as life insurance mortgage protection.
- The purpose is to ensure that if the borrower passes away during the loan tenure, the outstanding mortgage is fully repaid by the insurer.
- Technically, this is not a loan on policy of life insurance, but rather a loan protection insurance arrangement tied to your mortgage.
- It is widely available and considered a standard requirement by UAE banks.
Key Features of Term Life + Mortgage
- Affordable premiums compared to whole of life insurance
- Coverage directly linked to the mortgage balance
- Peace of mind for both borrower and bank, ensuring the debt is not passed on to family
Whole of Life Policy in UAE – Fund Value but No Loan Facility
Many expats and residents invest in a whole of life policy in UAE because it combines lifelong protection with a savings component. Over time, these policies build a fund value or cash value.
However, when it comes to how to borrow against life insurance in the UAE:
- You cannot take a loan against the fund value of your whole of life policy
- Insurers here don’t have a facility for direct loan against life policy
- If you need access to funds, you can only withdraw partially (if allowed) or surrender the policy to get its accumulated value
In short, while the whole of life insurance UAE helps with wealth building and protection, it is not eligible for loan on life policy in the UAE market.
Key Features of Whole of Life Plans in UAE
- Lifelong coverage
- Investment and savings component with potential returns
- No loan against policy facility in the UAE
Quick Comparison: Term Life vs Whole of Life in UAE
|
Feature |
Term Life Insurance (Mortgage Protection) |
Whole of Life Policy UAE |
|---|---|---|
|
Loan Facility |
Not available (used for loan protection) |
Not available |
|
Purpose |
Protect mortgage liability |
Lifelong protection + savings |
|
Fund Value |
No fund value |
Fund value grows over time |
|
Access to Money |
Not applicable |
Partial withdrawals or surrender |
Final Word – Can You Take a Loan Against Life Insurance in UAE?
- Term Life Insurance → Functions as mortgage protection, but does not allow you to get a loan against insurance policy
- Whole of Life Policy → Has a savings and fund value element, but still does not allow a loan against life insurance policy in the UAE
If your main goal is financing, you need to consider personal loans, home loans, or bank financing products instead of looking for a loan on life policy.
FAQs on Loan Against Life Insurance in UAE
Can I borrow against my life insurance in UAE?
No, you cannot borrow against life insurance policies in UAE. Whole of life plans may have a fund value, but insurers do not offer loans against them.
Is life coverage required for mortgage in UAE?
Yes. Banks in the UAE typically make it mandatory to take a term life plan as part of mortgage protection. This ensures the home loan is repaid if the borrower passes away.
What is the difference between term life insurance and whole of life policy in UAE?
Term Life Insurance → Pure protection, usually linked with mortgages.
Whole of Life Policy UAE → Lifelong coverage + savings component with fund value, but no loan facility.
Can I get cash from my life insurance policy in UAE?
You can access funds from a whole of life policy by surrendering the plan or making partial withdrawals (if allowed). However, there is no dedicated loan against policy option.
What is life insurance mortgage protection in UAE?
It’s a term life plan that protects your bank loan or mortgage. If the borrower dies, the policy pays off the outstanding loan amount, safeguarding both family and lender.
Know More About Other Investment Option
Other Insurance Products
Car Insurance Online | How to Check Car Insurance Status Online | Car Insurance Abu Dhabi | Health Insurance UAE | Best Medical Insurance In UAE | Schengen Travel insurance | Maternity Health Insurance | Top Health insurance Companies in UAE | Travel Insurance Dubai | Travel Insurance Online
Aashima Mongia
More From Term Insurance
- Recent Articles
- Popular Articles
Last Updated : 10 Feb 2026Term Insurance Comparison in UAE 2026: Compare Term Life Insurance Plans & RatesCompare term insurance plans in the UAE. Check term life insurance rates, riders, claim settlement ratios, and coverage to choose the right plan for your family.
Last Updated : 03 Feb 2026Top 10 Life Insurance Companies in India 2026: Best Term & Life Policies ComparedDiscover the top 10 life insurance companies in India. Compare claim settlement ratio, solvency, and the best term & life insurance policies for residents and NRIs..jpg)
Last Updated : 23 Dec 2025MetLife Insurance vs HAYAH Insurance UAE 2026: Premiums, Benefits & Coverage ComparedCompare MetLife vs HAYAH life insurance in UAE. Explore term plans, benefits, costs, coverage limits, eligibility & claims to choose the right policy.
Last Updated : 16 Dec 2025Zurich vs HAYAH Insurance UAE 2026: Premiums, Benefits & Coverage ComparedCompare Zurich vs HAYAH Insurance UAE on premiums, benefits, coverage, claims, and suitability. Find out which life insurance is better for UAE residents.
Last Updated : 11 Dec 2025Mandatory Mortgage Life Insurance in UAE: Cost, RequirementsBuying a property in the UAE? Mortgage life insurance is mandatory. Learn how it works, eligibility, cost, coverage types, benefits, and how to apply for life insurance for a home loan in the UAE.
Last Updated : 11 Dec 2025Best Term Insurance for High Net-Worth Individuals (HNIs) in UAE | High Sum Assured PlansExplore the best term insurance plans for high-net-worth individuals in the UAE. Get high sum assured coverage, legacy protection, and exclusive benefits with HNI term insurance designed for wealth preservation and family security.
Last Updated : 24 Dec 2025Best Life Insurance Companies in Dubai, UAE (2026 Updated List) Find out more about life insurance companies in the UAE and compare features and benefits offered. Buy best life insurance plan now!
Last Updated : 12 Dec 2025Best Self Employed Insurance Plans Online in UAETerm Insurance Plans for Self Employed - Know how to select the best term plan for self-employed individuals & why it is required and who needs it only at Policybazaar.ae
Last Updated : 02 Jan 2026Term Insurance for NRI | Best Term Insurance Plan for NRI in UAETerm Insurance for NRI - Compare and Buy best term insurance policies for NRI in UAE & know important things before buying the term plan for NRI in UAE.
Last Updated : 28 Oct 2025Term Insurance for Spouse in UAE - Features & BenefitsTerm Insurance for Spouse - Choose the best term insurance plan for your spouse in UAE with features & Benefits. Also, know who can buy a spouse term insurance plan.
Last Updated : 19 Sep 2025Short Term Disability Insurance | Benefits & How It WorksDiscover short term disability insurance options to safeguard your income during challenging times. Get affordable coverage tailored to your needs!
Last Updated : 12 Dec 2025Top Life Insurance Plans for Expats in the UAE: Protect Your Family's FutureDiscover the best life insurance options for expatriates in the UAE. Learn about key benefits, top plans, and essential tips to secure financial protection for your loved ones.
