UAE: Rising Demand for Term Life Insurance Among Youth Amid Growing Health Concerns

Awareness of financial planning and health risks post-Covid-19 drives an increase in term insurance adoption across the UAE.

The demand for term life insurance is growing rapidly in the UAE, fueled by heightened awareness of financial planning, the aftereffects of the Covid-19 pandemic, and a steadily increasing expatriate population. This trend is further amplified by health concerns among younger residents, including a rise in cardiac issues, prompting families to secure financial protection early.

Term Insurance: A Financial Safety Net

Term insurance, often regarded as an affordable and essential safety net, offers financial protection to a policyholder’s family in case of unforeseen circumstances. Upon the insured individual’s passing during the policy term, the payout is provided to the nominated beneficiary.

“Term insurance demand in the UAE is on the rise due to increased awareness of financial planning, the impact of the pandemic, and a growing expatriate population seeking financial security for their families,” said Avinash Babur, CEO of Insurancemarket.ae.

Factors such as age, health status, and the chosen policy duration influence premiums. However, premiums can nearly double for individuals with pre-existing health conditions like diabetes, underscoring the importance of early enrollment to lock in lower rates.

Youth Opting for Coverage

Traditionally, term insurance has been a choice for older individuals focused on protecting dependents. However, a noticeable shift is occurring, with younger residents securing policies earlier in life.

“This shift is largely due to changing lifestyles and the increasing prevalence of health conditions, such as heart attacks, among younger adults. Many now recognize the importance of financial protection for their loved ones in the event of unforeseen circumstances,” explained Atul Kathuria, Business Head for Term/Life Insurance and Investments at Policybazaar.ae.

Doctors have pointed to sedentary lifestyles, poor dietary habits, stress, and obesity as significant contributors to these health concerns. This awareness is prompting families to prioritize financial planning for younger members, although comprehensive data on this trend is still emerging.

Rising NRI Interest in Term and Health Insurance

The growing expatriate population, particularly non-resident Indians (NRIs), is also driving demand for term insurance in the UAE. According to a Policybazaar study, NRIs now account for 12% of all term insurance customers, with a noticeable increase in the number of female policyholders.

Tarun Mathur, Co-founder and CBO of Policybazaar.com, noted, “The pandemic served as a wake-up call for many, especially NRIs with families back in India. Competitive premiums in India continue to attract NRIs from around the world.”

The UAE leads the GCC region in NRI term insurance adoption, with most policyholders aged between 31 and 40. The sum assured by UAE-based NRIs averages Rs18 million, reflecting the high cost of living and increased financial responsibilities.

Additionally, health insurance among NRIs has seen 100% year-on-year growth, with 60% of policies purchased by residents in Gulf countries like the UAE. A growing interest in comprehensive health coverage, such as outpatient department (OPD) benefits and coverage for pre-existing conditions, underscores the demand for better healthcare access.

A Growing Market

The UAE’s life insurance market is projected to reach a gross written premium of $3.87 billion (Dh14.2 billion) in 2024. This significant growth reflects the combined impact of a rising expatriate population, changing health patterns, and increased financial awareness.

As awareness continues to grow, more residents are expected to embrace term and health insurance as critical tools for securing their financial future and protecting their loved ones.