Life Insurance – Why do you need one?

Allow me to tell you this interesting fact. According to Friends Provident International (FPI) Survey conducted by YouGov in 2018, 51 percent of UAE residents do not have a Life Insurance!

Of this lot, 36 percent said it was too expensive while 30 percent of respondents were not familiar with the concept of life insurance. Another 39 percent said they were not familiar with critical illness insurance.

The future is undoubtedly unknown and anything might happen as we hear and read people die of sudden illness or a prolonged illness or even meeting with a fatal accident leaving their family financially unstable or in some cases in ruins.

So, what is the best way to safeguard them?

Taking a Life Insurance Policy is the answer for you.

Even though paying premiums for life insurance policies can be expensive, the support they provide at critical situations eases and make us realize that the monthly installments paid are never a waste.

Read this article to find out….

Securing your family and your hopes:

Opting for life insurance can your safety net in times of any financial emergency, be it paying for your child’s education or assisting your spouse financially even if you’re not there to help them out.

Essential Benefits Plan (EBP) is the most basic health insurance plan for the residents of UAE that offers coverage to any treatments, emergencies or even maternity. This has been now mandated by the government for every citizen in the country. It has an annual claim limit of AED 1,50,000.

For non-working dependents:

SANAD Health Insurance plan is only for non-working dependent individuals carrying a Dubai resident visa. It won’t be requiring any eligibility checks, declaration or medical history. You only need the proof for dependency for approval of the SANAD program which will be activated through the Emirates ID of the individual insured.

Critical illness, on the rise:

A study claims that the average age of critical illness in Dubai is 48 as of 2018 [Source: Gulf News]. Despite owning general health insurance, the need for residents to opt for an income protection plan is inevitable.

Critical illness cover is a living benefit to customers being diagnosed with a predefined illness such as cancer and bears an age limit of 59 to avail one. It helps them meet other requirements such as rent, cost of travel for any advanced treatment than the most expensive, treatment costs and medication which will be taken care by the general health insurance policy. You may not get the whole benefit from the insurance company if your critical illness is caused due to:

• Any genetic disorder

• Tobacco or drug abuse

• HIV infection

• Self-intentional injuries such as suicide

Flexible for your needs and saves taxes:

There are three major types of insurances offered:

• Level term insurance provides protection for a specified period. It will expire and the coverage will end if you outlive your policy.

• Whole of life term pays out a lump sum whenever you die. It is expensive when compared to level term, and it pays out premiums till the age of 95.

• Decreasing term puts forth similar conditions as level term insurance, but the amount reduces as the policy matures which makes it the cheapest of the three.

The policy which we feel is more credible can be chosen.

Irrespective of what plan you buy, you can save taxes by enrolling in a policy.

Life is uncertain: 

You may be young and healthy now but if you suddenly fall ill, you may not be eligible for a Life Insurance policy. Therefore, it is important to buy one when you are young because it remains in force if your health deteriorates later on.

Riders, which are add-ons can be selected to personalize your policy. For instance, the accelerated death benefit rider allows the policy owner to avail a portion of the death benefit coverage for any treatment purposes on submission of medical bills to the insurance company.

Top-ups can be another option which covers all treatment costs other than riders which cover the same for only a few illnesses. They also carry a cheaper tag and needs to be bought separately other than the Essential Benefits Plan (EBP).

To sum it up, investing in a life insurance policy at an early age gives a host of benefits, reduced premium and tax savings too. Of course, the peace that your family gets knowing the earning member and others are insured is beyond compare.