Most UAE lenders require two types of insurance before releasing a mortgage: life cover and property (building) cover. Understanding how these work — and how premiums are set — helps you avoid overpaying on mandatory protection.
Mortgage life insurance
Life cover repays the outstanding mortgage if the borrower passes away, protecting both the family and the lender. Premiums typically run around 0.3–0.6% of the loan balance per year and depend on age, health, loan size, and tenure. Cover usually reduces as your balance falls.
Property (building) insurance
Property insurance covers the structure against fire and specified risks. It is generally inexpensive relative to the loan and is required for the life of the mortgage. For apartments, some building cover may already sit within community service charges — worth checking to avoid duplication.
How to avoid overpaying
Banks often bundle their own insurance, but you are frequently allowed to assign an external policy that meets their requirements — sometimes at a lower cost. Compare the bank's offer against independent providers before signing, and confirm the policy satisfies the lender's conditions.