Life Insurance for Expats in Saudi Arabia: Selecting the Right Option

This article provides an overview of the Saudi life insurance market, highlights the challenges expats face when seeking coverage, and offers guidance on assessing internationally portable life insurance options suitable for globally mobile professionals.

What Makes the Saudi Arabian Life Insurance Market Unique?

Although Saudi Arabia’s insurance market is well-developed, life insurance (Takaful) accounts for only a small portion of it. In 2022, savings and protection products comprised approximately 3.5% of total gross written premiums, compared to 59.7% for health insurance and 19.4% for motor insurance according to the Saudi Central Bank (SAMA) Insurance Market Report 2022.

This disparity reflects the regulatory context: health insurance is mandatory in Saudi Arabia, whereas life insurance is optional. As a result, local insurers offer a broader range of health insurance products than life protection plans.

Equally important, the structure of life insurance in Saudi Arabia differs markedly from that in conventional insurance markets. Instead of standard life insurance, the Saudi market predominantly operates on a Takaful basis—a cooperative system of mutual protection and financial aid built on the Islamic (Sharia) principles and overseen by the Saudi Insurance Authority (SIA).

Takaful and conventional Western life insurance products differ in several key aspects, as outlined in the table below:

What Are the Challenges of Obtaining Life Insurance in Saudi Arabia as an Expat?

Accessing Sharia-compliant life (family Takaful) solutions in Saudi Arabia can be challenging for several reasons, most notably:

1. Limited availability of local options.
2. Portability constraints.
3. Currency considerations.
4. Policy exclusions and jurisdictional limitations.

Limited Availability of Local Options

Local Saudi insurers primarily offer life protection through cooperative (Takaful) arrangements, as conventional life insurance products are not authorised under Saudi law. Under Islamic (Sharia) principles, traditional life insurance contracts are considered to contain three prohibited elements:

1. Usury/interest (“riba”)
2. Gambling (“maysir”)
3. Uncertainty (“gharar”)

Unlike many foreign markets, where local insurance offerings broadly resemble Western products, Saudi Arabia maintains a self-contained, Sharia-compliant insurance system regulated by the Saudi Insurance Authority (SIA).

Even where participation in a Takaful plan is theoretically possible, expats may find it difficult to obtain or manage coverage without support from a licensed local intermediary or adviser.

Given these constraints, many expats seek coverage through international or offshore providers, subject to Saudi and foreign regulatory restrictions.

Portability Constraints

Because most expat assignments in Saudi Arabia are temporary, portability is essential to avoid lapses when relocating or repatriating.

Most Saudi Takaful providers offer coverage only to lawful residents (Iqama holders). If your residency ends, continuation or adjustment of the policy may be restricted, and certain servicing actions, such as changing beneficiaries or updating contact details, might not be available from abroad.

Premiums are typically payable only from Saudi bank accounts, which are linked to visa and Iqama validity. Once residency ends, account restrictions may disrupt ongoing premium payments or claim settlements.

Currency Considerations

Any locally issued policy will be denominated in Saudi Riyal (SAR), which is pegged to the US dollar. This provides stability but may not align with financial obligations denominated in other currencies (e.g. GBP, EUR, or AUD).

If benefits are paid in SAR, their effective value upon conversion may vary depending on exchange rates and transfer fees. Premium payments from overseas can also attract foreign exchange costs and transfer delays, particularly if made from non-Saudi accounts.

Policy Exclusions and Jurisdictional Limitations

Life insurance policies typically include standard exclusions, some of which are particularly relevant for expats in Saudi Arabia. For instance, the insurer may not provide a payout in the event of death caused by:

• War.
• Acts of terrorism.
• Civil unrest.

While Saudi Arabia remains stable and secure, regional geopolitical conditions can influence underwriting practices and exclusions, even for international or portable policies.

Some locally issued Takaful policies also limit coverage to deaths occurring within Saudi territory, making them less suitable for frequent travellers or expats planning relocation.

Others provide worldwide coverage, subject to exclusions for sanctioned or high-risk countries, you should always confirm the territorial scope before purchase.

How To Find Internationally Valid Life Insurance for Expats in Saudi Arabia?

Given the limited local availability of Sharia-compliant life (family Takaful) products, you will likely need to explore international or offshore solutions. To identify an appropriate policy, consider the following steps:

1. Identify licensed insurers
2. Select the appropriate policy type and duration
3. Confirm portability and cross-border servicing capability

1. Identify Licensed Insurers

Your insurer must be licensed by the Saudi Insurance Authority (SIA) to operate or market within the Kingdom, regardless of its home jurisdiction. The SIA, formerly the Saudi Central Bank (SAMA), licensed the first foreign insurance branch in 2023, so international options for expats remain limited and developing.

Foreign (“offshore”) life insurance coverage is not automatically permissible for Saudi residents. If an insurer markets to, or conducts business with, clients physically located in Saudi Arabia, Saudi licensing and marketing rules apply.

In limited circumstances, a policy may be arranged outside the Kingdom through reverse solicitation, where the client initiates contact independently, but this must be verified for legal and regulatory compliance before purchase.

If you are uncertain about these requirements, consulting a licensed and cross-border-qualified financial adviser like Titan Wealth International is advisable. A regulated adviser can help identify compliant insurers and ensure that any international arrangement meets both Saudi and foreign-jurisdictional rules.

2. Select The Appropriate Policy Type and Duration

Life insurance can serve multiple objectives, so align your policy with your financial responsibilities, intended length of stay, and family needs.

You can generally choose between term and whole life insurance:

3. Confirm Portability and Cross-Border Servicing Capability

International life insurance is designed to maintain coverage when you relocate. To ensure true portability, confirm that the policy allows:

• Residence or address changes without altering benefits.
• Premium payments from overseas bank accounts or multiple currencies.
• Claims processing and benefit payments worldwide (subject to standard exclusions).

A truly portable policy should ensure that your beneficiaries can receive the death benefit wherever the event occurs, subject to applicable exclusions. Always review the policy terms carefully to understand how relocation may affect coverage, waiting periods, or claims documentation requirements.

Keep in mind that portability depends on the insurer’s regulatory authorisation and the governing law of the policy, some benefits or claim procedures may vary by jurisdiction.

If premiums or benefits are denominated in a foreign currency, exchange-rate fluctuations and transfer fees may affect the value received.

Operationally, reputable international insurers should offer:

• 24/7 multilingual support.
• Online servicing and claims submission.
• Experience handling cross-border documentation and compliance requirements for expat clients.

Which Factors To Consider When Selecting an International Life Insurance Provider?

The most important criteria for selecting an international insurer include:

• Reputation and financial stability: Closely examine the insurer’s ratings provided by independent agencies, as well as their history of successful claims. Focus particularly on any past solvency problems or regulatory interventions.
• Regulatory jurisdiction: Choose providers that are licensed and supervised in well-regulated financial centres offering strong consumer-protection and capital-adequacy frameworks. Clarify how both the insurer’s home jurisdiction and your own country of tax residence treat policy proceeds, to avoid unexpected tax or reporting liabilities.
• Transparency and governance: Prefer insurers that disclose all fees, surrender penalties, and investment-linked risks clearly and that maintain independent oversight through external auditors or regulatory filings.
• Currency flexibility: Select an insurer able to accept premiums and pay benefits in multiple major currencies. This helps reduce foreign-exchange exposure and allows beneficiaries to receive proceeds in their preferred or local currency.
• Underwriting and Expatriate Understanding: The insurer should recognise the mobility patterns of expats in Saudi Arabia and apply underwriting terms that reflect frequent travel, regional risk, and lifestyle factors.

Why Are Offshore Insurers Particularly Appealing to Expats in Saudi Arabia?

In a restricted life (Takaful) insurance market such as Saudi Arabia’s, international or offshore insurance companies can offer a practical alternative for expats, provided any arrangement complies with both Saudi licensing rules and the regulations of the insurer’s home jurisdiction.

The appeal of offshore insurance companies typically stems from features designed for globally mobile clients, including:

• Global portability: Many offshore insurers provide internationally valid policies that maintain continuous coverage regardless of relocation. Such policies can usually remain in force after you leave Saudi Arabia, whether you repatriate or move to another country, subject to the insurer’s servicing capabilities and regulatory permissions.
• Higher coverage flexibility: International insurers based in well-regulated financial centres such as Singapore, Hong Kong, or Bermuda are familiar with the needs of high-net-worth expatriate clients, and may offer higher or more flexible sum-assured limits than those typically available from local providers.
• Support for multi-jurisdictional planning: Experienced offshore insurers routinely manage cross-border beneficiary, estate-planning, and documentation requirements for clients with family members or assets in multiple countries, helping to streamline succession and claims administration across jurisdictions.