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.

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:

Policy Term

Age

Cover

Payment Frequency

YearlyMonthly

98.1% Claim Settlement Ratio

Term Life Protect

Life Cover (AED)1,000,000

Policy Term (Years)10

Passive War Cover
Pre Existing Disease Coverage
Medical Checkup Not Required
Worldwide Coverage

95% Claim Settlement Ratio

Term Life

Life Cover (AED)1,000,000

Policy Term (Years)10

Worldwide Coverage
Life Cover
Entry Age

98% Claim Settlement Ratio

International Term Assurance

Life Cover (AED)1,000,000

Policy Term (Years)10

Passive War Cover
Pre Existing Disease Coverage: Subject to Approval*
Medical Checkup Not Required
Worldwide Coverage
Critical Illness Cover

98% Claim Settlement Ratio

Live Life Now

Life Cover (AED)1,000,000

Policy Term (Years)10

Worldwide Coverage

98% Claim Settlement Ratio

Critical Illness Protection

Life Cover (AED)1,000,000

Policy Term (Years)10

Worldwide Coverage
Cancer Cover

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

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.

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.

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.

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.

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.

Everything You Need to Know About Life Insurance
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Whole Term Life Insurance Policy	How to Get Loan Against Insurance Policy
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Life Insurance Claim Settlement Ratio	Senior Citizen Life Insurance

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Last Updated At - 15 September 2025

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Aashima Mongia

Content Writer (Expertise: Term Life Insurance & Investment)

Aashima Mongia is a Content Executive at Policybazaar.ae, dedicated to bridging the gap between complex financial products and the people who need them. Specializing in Term Life Insurance and Investment portfolios, Aashima translates the "fine print" into high-value insights for the UAE market. With a background rooted in Commerce and Digital Strategy, she combines rigorous research with an audience-first philosophy. Her work is a blend of data-backed research and a deep understanding of the UAE's economic pulse, ensuring that every guide she writes is practical, timely, and easy to digest.