One of the most important financial decisions you will make is to purchase life insurance. The future is unknown, and many people die too soon each year because of accidents or catastrophic illnesses. Have you ever considered how your family members would cope if you were to deal with such a calamity?
It is your obligation as the family's single earner to ensure the financial security of your loved ones' future. Even if you are no longer able to provide for your family, a life insurance policy can help them maintain their standard of living and meet all of their financial demands.
Let's look at what a life insurance policy is and how it can help you provide for your family in the event of your death. And that's not all! We will also guide you through the best life insurance plans available in the UAE.
Life Insurance and How Does It Work?
Life insurance is a contract between a policyholder and an insurance provider in which the insurer (insurance company) promises to pay a certain amount of a death benefit to the beneficiary if the policyholder dies unexpectedly during the policy's term.
In exchange, the insured agrees to pay a set amount of money as a regular premium, a limited premium, or a one-time premium. One can safeguard the financial stability and security of their family's future by purchasing adequate life insurance coverage.
UAE Life Insurance Policy
In the United Arab Emirates, there are a few life insurance firms that offer a wide range of life insurance plans, including endowment policies, term plans, whole life insurance, ULIPs, and so on. Premium rates for life insurance in the UAE vary by policy and are determined by the applicant's age, medical history, sum assured, income, and a variety of other factors. Applicants, on the other hand, can simply obtain the best life insurance coverage at the greatest price by conducting thorough market research and comparing best life insurance quotes. The due price for a fair coverage of AED 1 million ranges from AED 1200-1400.
Cost of Life Insurance in UAE
Medical services in the United Arab Emirates are pricey, but you get what you pay for. Public hospitals and clinics are low-cost or free for UAE citizens. Expats must pay a charge and must have a health card to visit public hospitals and clinics.
Average Cost of Life Insurance in the UAE
In the United Arab Emirates, most employers incorporate Life Insurance as part of their compensation package. This isn't always the case, though. You should expect to pay roughly 10,000 AED per year for a reasonably comprehensive medical insurance policy (2,720 USD). Premiums for a thirty-year-old expat on a comprehensive plan range from roughly 5,500 AED (1,500 USD) to around 33,500 AED (9,120 USD) for a family of four on a comprehensive plan. For a family of four, a basic coverage plan should cost roughly 17,000 AED (4,630 USD).
|
Term Insurance Plan |
Life Cover |
Accident Cover (From Day One) |
Sickness Cover (From Day One) |
|---|---|---|---|
|
AXA - Life Protect |
AED 250,000 |
AED 250,000 |
AED 250,000 |
|
Takaful Emarat - Fixed term |
AED 250,000 |
AED 250,000 |
AED 250,000 |
|
Noor Takaful - Pure Protection |
AED 250,000 |
AED 250,000 |
AED 250,000 |
|
National Life |
AED 350,000 |
AED 350,000 |
AED 350,000 |
|
Noor TakafulPure Protection Cashback |
AED 200,000 |
AED 200,000 |
AED 200,000 |
Who is eligible to apply for life insurance in the United Arab Emirates?
Everyone now needs to get a life insurance coverage. If they match the eligibility criteria established by the insurance provider, all UAE citizens are entitled to apply for a life insurance policy.
The following are the eligibility requirements for purchasing a life insurance policy:
- To be eligible to enter an insurance arrangement, applicants must be between the ages of 18 and 75.
- Applicants must have a steady and consistent source of income.
- The applicants for policies must be UAE residents with proof of residency.
- Emiratis can choose from a variety of life insurance UAE policies if they have the necessary paperwork.
- Expats in the UAE can also get life insurance if they have the necessary paperwork.
- Please keep in mind that the minimum eligibility requirements for each insurer may differ.
Documents Required to Buying a Life Insurance Policy:
An applicant needs to submit the following documents to buy a life insurance UAE policy:
- Passport-sized photographs
- Emirates ID
- Passport with UAE residence Visa (for expats)
- Address Proof (For example utility bills)
- Bank Statement from the past three to six months
- Income certificate
- Salary slip
- Proof of health status
Note: However, policy buyers may also need to submit some additional documents as requested by the insurance company.
Types of Life Insurance in the United Arab Emirates
There are several different types of life insurance policies available in the UAE, including the following:
1. Term Life Insurance
Term insurance is the most basic and cost-effective type of life insurance policy, providing financial protection to the insured for a set period. A death benefit will be given to the beneficiary if the life assured dies during the term period while the plan is active.
2. Whole Life Insurance
A whole life insurance policy covers the policyholder for the rest of his or her life. The sum promised is paid to the beneficiary in the event of the insured's untimely death. This form of life insurance policy, in addition to providing a death benefit, also includes a savings component that builds up a cash value that policyholders can withdraw or borrow as needed.
3. Endowment Plans
Endowment plans are a type of life insurance policy that not only provides coverage in the event of the policyholder's untimely death, but also provides maturity benefits at the policy's end.
4. Unit Linked Insurance Plan (ULIP)
The Unit Linked Insurance Plan, or ULIP, is a combination of insurance and investing. The money invested is split into two parts because it is a hybrid plan. A portion of the premium is used to protect your life, while the remainder is invested in the stock market to ensure future riches.
5. Money Back Policy
The policyholder receives a percentage of the sum assured at regular intervals during the term of the policy in this form of life insurance policy. An insured receives the balance of the sum assured if he or she survives the term. However, regardless of how many payments have been paid out, the nominee receives the entire sum promised in the event of death within the plan's term.
6. Pension Plan
This life insurance policy, often known as a retirement plan, assures a financially secure retirement by providing a regular income as an annuity payment, depending on the type of policy chosen. This sum will be invested at maturity to provide a regular income stream, which is known as an annuity or pension.
Benefits of a Life Insurance Policy in the United Arab Emirates
Consumers can profit from life insurance in a variety of ways. The following are some of the most important advantages of life insurance policies:
Death Benefit: If a policyholder dies during the policy's term, leaving their family without an income, the life insurance company will compensate them with a death benefit.
Guaranteed Income: Life insurance contracts include a guaranteed sum assured amount, which is paid to the beneficiaries by the insurance company upon the policyholder's death.
Medical Expense Coverage: Life insurance policies also cover severe illness and hospitalization costs. In the event of a handicap or a diagnosis of an illness, a life insurance policy helps you to seek appropriate treatment.
Peace of Mind: Purchasing the greatest life insurance coverage provides an individual with peace of mind, knowing that their loved ones will be cared for in the event of an unforeseen occurrence.
Conclusion
As we can see getting a life insurance is not a big task you just need to be aware of the of the type of insurance that best fits you at a good price. Many companies at UAE are providing great insurance covers. We hope this article gave you a good insight of how to buy an insurance, its benefits and documents needed, to know more about the topic you can connect to our experts at Dhanguard which would have a great delight to assist you. You can also visit our website to learn more.