Life Insurance for Expats in the UAE: Options, Eligibility, and Key Considerations

This article explains the importance of life insurance for expats in the UAE, compares local and international insurance options, and explores different types of policies available to expats.

Why Do You Need Life Insurance for Expats in the UAE?

Obtaining life insurance while residing in the UAE can help you transfer wealth to your beneficiaries in a financially efficient manner. Doing so may help ensure that your family can meet their financial obligations, including daily expenses and debt payments, in the event of your passing.

In addition to beneficiary protection, life insurance policies in the UAE can support succession and estate planning objectives. The UAE does not currently impose personal income tax or inheritance tax, which means life insurance proceeds are not taxed by the UAE.

However, tax treatment in your or your beneficiaries’ home country may differ.

For example, US persons are generally not subject to income tax on death benefits under Internal Revenue Code §101, but the policy’s value may be included in the taxable estate if ownership rights are retained.

Double taxation agreements (DTA) between the UAE and other countries typically cover income taxes only, and do not generally apply to estate or inheritance taxes.

The US has no income-tax treaty with the UAE, so life insurance proceeds could still be subject to US estate or gift tax depending on ownership and structure.

Consulting an experienced financial adviser at Titan Wealth International can help ensure your policy is structured appropriately for cross-border estate and tax planning, and that you claim any available reliefs under applicable treaty or domestic tax rules.

Local vs. International Life Insurance in the UAE: What Is the Difference?

Expats residing in the UAE can purchase either locally issued or international (offshore) life insurance policies.

Locally issued policies are regulated by the Central Bank of the UAE (CBUAE) and are often suitable for expats intending to reside in the UAE long-term.

International or offshore policies are usually established under foreign regulatory regimes (e.g. Isle of Man, Guernsey, or Bermuda) and are designed for those who relocate frequently, plan to repatriate, or require protection outside of the UAE.

The following table outlines key typical differences between these two categories of policies:

Applying for life insurance does not guarantee that you will be approved for coverage. To determine your eligibility, insurance companies follow an underwriting process to assess your risk profile.

Underwriting is the process of evaluating risks associated with a person or asset to determine whether they qualify for insurance coverage, what the premiums would be, and the specific terms and conditions that would apply to the policy.

It typically requires information about your age, health, lifestyle, and financial circumstances. It can also include expat-specific considerations such as residence history, travel frequency, and occupational risk.

Underwriting standards and flexibility vary by insurer and jurisdiction. Some international life insurance companies in Dubai are more accommodating of mobile expats, though their premiums may be higher to reflect that broader coverage scope.

Which Types of Expat Life Insurance in Dubai Should You Choose?

Expats in the UAE have access to several types of insurance coverage, each with unique coverage terms, costs, and eligibility requirements. Your chosen policy will depend on your financial circumstances, protection needs, and country of tax residence.

The most common locally issued and international expat life insurance options in the UAE include:

• Term life insurance.
• Whole life insurance.
• Universal or variable universal life insurance.
• Unit-linked insurance.
• Mortgage life insurance.

Term Life Insurance

Term life insurance provides protection for a specified period, commonly between 5 and 35 years. It pays a lump sum death benefit to your beneficiaries if you pass away during the policy term. If the insurance term ends before you die, the policy will lapse without payout.

Purchasing a term life insurance policy includes the following benefits:

• Affordability: Premiums vary by age, health, and coverage amount; some UAE providers advertise entry-level plans from under AED 100 per month, subject to underwriting.
• Flexibility: These policies allow you to choose the term duration that meets your financial plans. You can select a term of 5, 10, 20, or 30 years.
• Simplicity: Term life insurance policies are straightforward to understand and manage, even without extensive financial expertise.

Term life insurance is best suited to expats seeking temporary protection, such as those planning to reside in the UAE for a limited period.

Whole Life Insurance

Unlike term life insurance, whole life insurance policies provide:

• Lifelong coverage
• Guaranteed death benefit payout
• Tax-deferred fund growth

These policies include a savings or investment element. Any funds exceeding the minimum required premiums are invested and may earn a fixed or declared rate of return.

In the UAE, this growth is not subject to personal income tax, while expats who remain tax-resident elsewhere (for example, in the UK or US) may benefit from tax deferral under their domestic rules – subject to product qualification tests.

Withdrawals or loans from the cash value are usually allowed but will reduce the policy’s death benefit and may create a taxable event in some jurisdictions.

Because of the savings feature and lifelong protection, whole life insurance typically requires higher premiums and can be more complex to manage than term assurance. However, it offers:

• Stable premiums that remain the same throughout the policy’s life.
• Long-term wealth-accumulation potential.
• Access to accumulated cash value through withdrawals or policy loans.
• A cash-surrender value if you discontinue the policy.

Whole life insurance can be suitable for expats seeking permanent protection and a disciplined savings structure. It can help with long-term goals such as repaying debt, education funding, or estate liquidity.

Given the tax, reporting, and residency implications of these policies for expats, it is strongly advisable to seek professional cross-border financial advice before purchasing. Our advisers at Titan Wealth International can help determine whether whole life insurance aligns with your financial situation, tax residency, and estate-planning objectives.

Universal or Variable Universal Life Insurance

Universal life (UL) and variable universal life (VUL) insurance policies combine lifelong protection with an investment or savings component. They operate similarly to whole life insurance but offer greater flexibility in premium payments, death benefits, and investment choices.

A portion of each premium covers the cost of life insurance, while the remainder is allocated to a cash-value account that can grow either at a declared interest rate (UL) or according to the performance of selected investment funds (VUL). This means your policy’s value can increase over time, although the investment portion is subject to market risk.

For expats, these policies can provide significant advantages:

• Flexibility: Premiums and death benefits can often be adjusted, which is useful for expats whose income or residence may change.
• Currency choice: Many UL and VUL policies allow you to hold and receive benefits in multiple currencies, such as AED, USD, GBP, or EUR.
• Tax efficiency: In the UAE, there is no personal income or capital-gains tax, so policy growth is not taxed locally. However, if you remain tax-resident elsewhere, such as in the UK or US, policy gains may be tax-deferred only if your policy meets your home country’s qualifying conditions.
• Access to value: You can usually make withdrawals or take loans from the accumulated cash value, though doing so will reduce the death benefit and may create a taxable event in your country of residence.

Because of their flexibility and potential for investment growth, universal and variable universal life policies can suit long-term expats who want lifelong protection and adaptable savings options. However, these policies are more complex and can involve higher fees and investment risks than traditional life insurance.

Before purchasing, expats should seek cross-border financial advice to ensure that the policy aligns with their long-term objectives, tax residency, and reporting obligations.

Unit-Linked Insurance

Unit-linked insurance plans (ULIP), also known as investment-linked policies, combine two components:

• Life insurance coverage and,
• A market-linked investment component.

Similar to a whole-life policy, a portion of each payment goes toward the insurance premium, while the remaining funds are invested in chosen portfolios such as equity, bond, or multi-asset funds. The policy’s cash value fluctuates with investment performance rather than offering guaranteed returns.

In the UAE, investment-linked policies are regulated by the Central Bank of the UAE (CBUAE) under the life-insurance and family-takaful rules. There is no statutory lock-in period, though many products include early-surrender charges or allocation periods that reduce value if you withdraw funds in the first few years.

For expats, these plans can be attractive because they:

• Offer portable, multi-currency investment access, often managed from recognised offshore financial centres;
• Allow tax-advantaged or tax-deferred growth only where the expatriate’s home-country tax regime provides for it; and
• Combine life cover and long-term savings within a single structure.

However, returns depend entirely on market performance, and fees, fund charges, and currency risk can materially affect outcomes.

ULIPs are best suited to expats with long-term financial goals who are comfortable with investment risk and who understand the cross-border tax reporting obligations that may arise (for example, FATCA or CRS reporting for US or UK tax residents).

Mortgage Life Insurance

Mortgage life insurance, also known as decreasing-term assurance, is designed to repay your outstanding home loan if you die during the mortgage term. The cover amount decreases over time in line with your remaining balance, making this type of life insurance more affordable than level-term or whole-life cover.

For expats living in the UAE, this policy can provide essential protection for family members who may wish to remain in the property or avoid financial hardship if you pass away.

As most UAE mortgages must be repaid in full upon the borrower’s death, mortgage life insurance ensures that your dependents are not left with the debt or forced to sell the property.

Many UAE banks require life cover as part of a mortgage agreement, but the bank-arranged policy is often basic and may not offer the flexibility or portability that expats need if they move abroad. Taking out an independent mortgage life policy allows you to:

• Choose your own insurer and maintain cover even if you change lenders or leave the UAE.
• Select the currency of the payout (AED, USD, GBP, or EUR), which can be important if your mortgage or beneficiaries are overseas.
• Add optional riders for critical illness or disability, providing broader protection if your health affects your ability to work.

Mortgage life insurance is a practical option for expats who have property loans in the UAE and want to ensure that their families or beneficiaries are financially secure, wherever they live.