Demand for life insurance rising

Dubai: The demand for life insurance cover in the UAE is growing rapidly as the country's mortgage market increasingly adopts preferred global insurance practices to back mortgage applications.

Mortgage payment protection schemes offer short-term coverage of payments of instalments when a homeowner is unexpectedly out of employment or requires assistance due to a sudden illness or an accident, said Nigel Watson, sales director at Nexus Group of Companies. The mortgage payment protection, however, does not cover the entire repayment of a mortgage loan, he added.

With life policies accounting for 16 per cent of the insurance market in the UAE, mortgage and financial advisors are stressing the need for deeper market penetration of life insurance covers to secure home loans, financial debts and offer financial security to dependents in cases of tragedies.

Surge

According to research from industry analysts, life insurance covers increased by 37 per cent in 2006 and have been forecast to surge at 18 per cent annually until 2011.

"In the UAE, we believe high demand and increase in values for individual life insurance will reach six figure records," said Watson.