What is Term Life Insurance in UAE ?

By Ananya - 04 Apr 2022 Last Updated: 20 May 2022
What is Term Life Insurance in UAE ?

Insurance companies in the UAE offer a variety of enticing Life Insurance options. Term insurance is the cheapest of these options due to the extensive life insurance coverage it provides for modest prices. With term insurance, you can get life insurance for a set period of time, ranging from 5 to 35 years. Furthermore, term insurance policies feature a number of benefits such as critical illness coverage, premium refunds, and more.

In addition to traditional Term Insurance Plans, takaful businesses in the UAE offer Sharia-compliant term plans that are in conformity with Islamic financial laws, as well as the guarantee of a protective shield that we may require. Read on to learn about many aspects of Term Life Insurance policies, including their features and benefits, as well as how to get one in the UAE.

What is a Term Insurance Plan?

A term insurance policy is a form of life insurance policy that covers the policyholder for a certain period of time with fixed premiums. Because there is no financial value in a Term Insurance Plan, the contract covers the policyholder for as long as the insurance premium is paid. In the event of the policyholder's untimely death, the beneficiaries are entitled to the death benefits. However, no life insurance is provided if the policyholder outlives the insurance term. You have the option of selecting an insurance tenure ranging from 5 to 35 years.

How Does Term Life Insurance Work in the UAE?

As previously stated, a term insurance policy is a limited-term life insurance policy that protects the policyholder and his or her beneficiaries against unanticipated circumstances. If the insured person dies during the policy's term, the insurer pays death benefits to dependent family members to help them meet their expenses and maintain their standard of living. The insurance company is obligated to pay any benefits if the insured outlives the insurance term.

In the event of an untimely death, the policyholders' beneficiaries get death benefits, which can be used to meet daily expenditures, pay off loans, EMIs, and college fees. As a result, a term insurance policy might be a valuable financial instrument for the family's breadwinner.

Term insurance policies include a number of benefits, which are listed below:

·        A term insurance plan might provide extensive coverage in exchange for low rates.

·        Because it is a simple protection plan, you do not need to expend much effort to comprehend the policy terms and conditions.

·        These plans are ideal for those on a tight budget.

·        With life insurance, you can customize and extend your protection by purchasing riders known as add-ons.

·        A term insurance policy protects your loans and mortgage in the event of your untimely death, removing the financial burden from your family.

·        Several term plans include coverage for critical and terminal illnesses. You can choose such plans to increase your protection based on your family history and vulnerability.

·        Depending on your needs, you can choose from a variety of term insurance options, such as decreasing or level term insurance.

·        Despite its low cost, term insurance provides global coverage. That is, you are safe wherever you go.

·        A term insurance policy also includes a premium waiver in the event of permanent disability while your coverage is still in effect.

·        When you purchase a term insurance policy online, you will receive an additional 10% -15% discount.

Who Should Purchase Term Insurance in Dubai?

Working people, young parents, and persons with dependent family members all need term insurance. They must purchase an appropriate plan to protect their loved ones in the event of an unforeseen event.

Individuals in the following categories must select a term protection plan.

Young Professionals

Young professionals who have recently begun working have fewer liabilities. It is the ideal time for individuals to purchase a term insurance policy because they can obtain high insurance benefits while paying modest premiums.

Parents

As the family's sole earner, parents want term insurance to safeguard their dependents from unexpected events and to financially secure them.

Newly Married Couple

A term insurance policy protects the spouse and helps him or her cope financially even after you die. Furthermore, term insurance for spouses can protect both husband and wife under a single policy, ensuring a significant death benefit.

Self-Employed Individuals

As a self-employed person, you have two obligations. One is for your loved ones, while the other is for your business. The benefits of term insurance can assist protect your business and your dependant family members.

Working Women and Single Parents

Working women and single parents should think about getting term insurance to protect their loved ones from unanticipated events.

Key Features & Benefits of Term Insurance Plans in UAE

With a term plan, you have unique choices for enhancing your life protection.

The following are the main benefits of term insurance in the UAE

Flexible Tenure

Depending on your age, you can choose term insurance plans with tenures ranging from 5 to 35 years. However, because insurance costs rise with age, it is best to purchase a term insurance policy before the age of 30.

Flexible Premium Payment Options

When you purchase a term insurance policy, you have the option of making flexible premium payments. Premiums can be paid in monthly, semi-annual, or annual installments. You can also pay your premiums in one lump sum for the entire period.

Easy to Buy

Term insurance plans are simple to purchase, with lax criteria and conditions, making your insurance application quick and simple. Other types of life insurance, such as whole life insurance or endowment policies, incorporate an investing component and create cash value upon maturity.

High Insured Sum

In relation to the premiums paid, term insurance policies offer high death payments if the policyholder dies during the insurance tenure. In the UAE, you may get a term insurance policy for less than AED 200 with a high coverage value of up to AED 5 million.

Flexible Payout Options

Depending on your needs, you can choose between lump-sum payments and staggered payments as a policyholder. The beneficiaries receive the insurance benefits all at once with a lump-sum payment. In the case of a staggered payment option, the candidates are paid on a regular basis.

Documents Required for Term Life Insurance Purchase

You must present required documentation as verification of your identity, age, and address, in addition to meeting the eligibility conditions.

The following is a list of documents that must be submitted when acquiring a term insurance policy in the UAE

·        Emirates ID for UAE nationals and residents;

·        Valid Passport ID for expats with a valid Emirates visa;

·        Utility bills for address proofs.

Complete Guide to Buy a Term Insurance UAE

To find the best term insurance plan, you need to take following factors into account:

Claim Settlement Ratio

This is the ratio of the total number of claims settled by an insurer to the total number of claims submitted. With a high claim settlement ratio, you can know that your claim applications are less likely to be rejected and that the insurer has a strong settlement process in place.

Solvency Ratio

When numerous claims are made in a calamity, it is difficult for insurance firms to settle all of the claims at once. The solvency ratio describes your insurer's ability to settle claims in the worst-case scenario.

Add-on Riders

Add-on riders supplement your life insurance coverage. Additional riders can be added to your insurance policy for a small fee. When purchasing a term insurance policy, you should investigate the variety of add-on riders offered by your insurer.

Company’s Reliability

You may learn more about an insurance business and read reviews about it by conducting a quick search. Before purchasing a term insurance policy, you should assess the insurance company's reputation and stability.

Terminal Illness Coverage

Several insurance companies include terminal illness coverage, which allows you to withdraw your insurance premiums if you are diagnosed with a terminal illness. In addition, you may claim a portion of your insurance coverage to cover treatment costs.

Conclusion

Depending on your needs, you may easily select numerous term plans, compare the best plans within your budget, and purchase online by following a few simple steps. You can also find various deals and rebates to take advantage of exceptional discounts.

You will begin to enjoy the benefits as soon as you begin your journey with us. We have excellent relationships with all of the leading Term Insurance Companies in the UAE at Dhanguard.

By Ananya

04-Apr, 2022

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