How to Protect your Mortgage Liability? - Financial Planning in Dubai

When availing a mortgage it also mandatory to protect the mortgage by life insurance, which pays out the outstanding mortgage on death of the investor.

Most banks offer life insurance along with the mortgage; for a premium calculated as a fixed percentage on the mortgage amount, protecting life and sometimes disability as well.

Although not mandatory it is highly recommended to include critical illness cover; when availing life insurance for your mortgage, because a diagnosis of critical illness will more often result in loss of income and cash flow crisis, making it difficult to pay the mortgage.

A critical illness rider will payout the mortgage; on diagnosis of one of the 35 critical illness covers by policies issued by leading insurance providers in UAE.

Click here to know more about critical illness rider.

Also read 3 Important Facts About Mortgage Insurance In Dubai.

Most insurance providers have dedicated mortgage insurance plans addressing the protection needs of property investors; the following table provides a snapshot of the mortgage insurance plans;

Zurich International Life Limited
Friends provident International
International Protector – Decreasing Term
Salama – Islamic Arab Insurance
Baity –Mortgage Takaful Plan
Decreasing Term Insurance

Thanks to quick processing of mortgage based life insurance applications, it os now very easy to avail a personalised mortgage insurance with critical illness cover.

Zurich international life is now offering life cover without medicals for up-to $500,000.

So if your mortgage is less than AED 1,838,000/- you can avail a personalised mortgage insurance quick and easy, without the hassles of medical tests.

The following are indicative premiums for a 35 years old male; non smoker availing a mortgage insurance of AED 1,500,000 for a 25 years term;

AED 2,159.75
AED 2,749.12
AED 6,773.03

Usually banks charges a fixed percentage (0.4% - 0.6%) of the mortgage amount as premium for life insurance protecting the mortgage under their group insurance plan.

This can work in benefit of people above age 45 or people with pre existing health conditions, but for young and healthy individuals, it may be prove to be costly.

It is better for younger individuals to avail personal mortgage cover with better coverage scope and more affordable premiums.

What about you? Do you have a mortgage or are looking to avail a mortgage?

If yes, please call me to check the best premium options for your mortgage insurance.

To know more and setup personal meeting to discuss about mortgage insurance or a comprehensive financial plan.

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