The UAE is experiencing a notable increase in demand for term life insurance, fuelled by heightened awareness of financial protection needs following the COVID-19 pandemic and the country’s expanding expatriate population.
A growing concern about health risks, including cardiac issues among young adults, is also prompting families to secure coverage for younger members.
According to industry experts, this shift is linked to a combination of evolving financial priorities and demographic trends.
Avinash Babur, CEO of Insurancemarket.ae, said he observes a rise in term insurance demand in the UAE due to a greater focus on financial planning post-pandemic and a surge in expatriates seeking security for their families.
“The demand for term insurance in the UAE is on the rise due to increased awareness of financial planning, the impact of the COVID-19 pandemic, and a growing expatriate population seeking financial security for their families,” he said, as reported by Khaleej Times.
Atul Kathuria, business head for term/life insurance and investments at Policybazaar.ae, highlighted the influx of expatriates as a key driver of demand. He also pointed to growing awareness about the role of term insurance in mitigating financial risks.
Term life insurance, designed to provide coverage for a set period at comparatively lower premiums, pays out an assured sum to the nominee in the event of the policyholder’s death during the term. The primary aim is to ensure financial stability for the policyholder’s dependents.
In the UAE, premiums vary depending on factors like the insured person’s age, health condition, and the duration of coverage. Conditions such as diabetes may lead to significantly higher premiums, underscoring the advantage of securing policies earlier in life when rates are typically more favourable.
The UAE life insurance market is projected to reach gross written premiums of US$3.87 billion by 2024, reflecting the sector’s growth potential.
Insurers have observed a trend of younger individuals purchasing term insurance earlier in life. Kathuria attributed this to lifestyle changes and the rising incidence of serious health conditions, including heart disease, among younger adults.
“Many individuals are now opting for term insurance at a younger age to ensure financial protection for their loved ones in case of unforeseen circumstances,” he said.
Healthcare professionals in the UAE note that sedentary lifestyles, stress, unhealthy eating habits, and obesity contribute to an increase in cardiac conditions among young people.
Babur added that families are increasingly recognising the importance of providing financial security for younger members in response to health concerns. However, he noted that more data is needed to fully quantify this trend.
Non-resident Indians (NRIs) in the UAE are also contributing to the rise in term insurance demand. A Policybazaar study revealed that the pandemic played a significant role in driving interest among NRIs looking to secure financial protection for their families in India.
Tarun Mathur, co-founder and chief business officer of Policybazaar.com, said NRIs from high-income countries, including the UAE, tend to purchase higher coverage amounts to account for the cost of living and family responsibilities.
“Buyers in high-income countries – such as the UAE, the US, and the UK – tend to opt for larger sum assured to match the higher cost of living and financial responsibilities,” he said, as reported by Khaleej Times.
