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What Is Life Insurance?
Life insurance is an agreement between an insurance company that promises to provide your beneficiaries with a certain amount of money upon your death. In return, you make periodic payments, called premiums.
A premium is paid as a limited premium or a single premium. With suitable life insurance coverage in place, one can ensure their family’s future financial stability and security.
A premium is paid as a limited premium or a single premium. With suitable life insurance coverage in place, one can ensure their family’s future financial stability and security.
Life Insurance Policy In UAE
Few life insurance companies in UAE offer a broad range of life insurance plans such as endowment policy, term plans, whole life insurance, ULIPs, etc. Applicants can easily get the best life insurance coverage at the right price if they indulge in proper market research and analysis by comparing best life insurance quotes. The premium rates for life insurance UAE vary from policy to policy, and it is based on the applicant’s age, medical history, sum assured, income, and several other factors.
As per a survey, it has been found that nearly 51% of the UAE residents do not have a Life Insurance policy; 36% of people said that it is too expensive, while the rest of the people are not familiar with this term. Though life insurance is not a popular product, a good cover certainly covers the financial security of the insured’s family, and it is an essential cover to lead a secured life.
As per a survey, it has been found that nearly 51% of the UAE residents do not have a Life Insurance policy; 36% of people said that it is too expensive, while the rest of the people are not familiar with this term. Though life insurance is not a popular product, a good cover certainly covers the financial security of the insured’s family, and it is an essential cover to lead a secured life.
How Does Life Insurance Policy Work In UAE?
Life insurance in UAE works in the following steps:
Step 1:
A policyholder pays the premium to the insurance provider.
Step 2:
An insurance company guarantees to pay a sum assured to the beneficiaries in case of the policyholder’s untimely demise during the policy period, ensuring the financial stability of the policyholder’s family.
Step 3:
On survival of the life insured until maturity, a maturity benefit will be payable to the policyholder. However, it depends on the type of policy and whether or not it offers maturity benefits.
Step 1:
A policyholder pays the premium to the insurance provider.
Step 2:
An insurance company guarantees to pay a sum assured to the beneficiaries in case of the policyholder’s untimely demise during the policy period, ensuring the financial stability of the policyholder’s family.
Step 3:
On survival of the life insured until maturity, a maturity benefit will be payable to the policyholder. However, it depends on the type of policy and whether or not it offers maturity benefits.
Types Of Life Insurance UAE
Whole Life Iinsurance
Whole life insurance policies will provide you with a set pay-out that is valid for your entire life as long as you continue paying the monthly premiums. One of the benefits of whole life policies is that you can often borrow money against them, as they represent a form of collateral.
Term Life Insurance
Term life insurance plans are arguably the most popular and simplest in regards to their mechanics. As the title already suggests, they are associated with a specific time frame that you can determine (usually measured in decades). The policy will remain active if you continue to satisfy the monthly premiums. If you cease paying premiums or should the term expire without any renewal, you will no longer be provided with coverage.
Endowment Plans
Endowment plans are a third option to consider. While it is similar in many ways to term insurance, there is one significant difference; endowment plans offer what is known as a maturity benefit. This essentially signifies that the policyholder will enjoy the ability to access funds during their lifetime. It may even be possible to select a subcategory known as a unit-linked insurance plan (ULIP). These packages are linked to specific assets such as stocks and mutual funds. Thus, they can be used as an investment opportunity as well as a standard life insurance plan.
Unit Linked Insurance Plan (ULIP)
Unit Linked Insurance Plan or commonly known as ULIP is an amalgamation of insurance and investment. Since it is a hybrid plan, the money invested is divided into two parts. One part of the premium goes towards protecting your life, and the rest is invested in the market to secure future wealth.
Benefits Of Life Insurance Policy In UAE
There are many benefits of life insurance for consumers. Some of the primary benefits of life insurance policies are highlighted below:
Accidental Death Benefit : Pays a cash sum in addition to the life cover sum insured where the life insured dies due to an accident.
Guaranteed Income: Life insurance policies come with the guaranteed sum assured amount payable by the insurance provider to the beneficiaries on the demise of the policyholder.
Peace Of Mind: Buying the best life insurance policy gives an individual peace of mind, knowing that the welfare of their loved ones is taken care of in case of any unforeseen event.
Helps In Wealth Creation: There are numerous life insurance plans in the market that provide the two-way benefit of coverage and investment. The premium paid by the policyholder is broken down and is used to provide coverage and investment benefits.
Guaranteed Income: Life insurance policies come with the guaranteed sum assured amount payable by the insurance provider to the beneficiaries on the demise of the policyholder.
Peace Of Mind: Buying the best life insurance policy gives an individual peace of mind, knowing that the welfare of their loved ones is taken care of in case of any unforeseen event.
Helps In Wealth Creation: There are numerous life insurance plans in the market that provide the two-way benefit of coverage and investment. The premium paid by the policyholder is broken down and is used to provide coverage and investment benefits.
How to Find Cheap Life Insurance Quotes in the UAE?
Life insurance is indeed the best way to provide your family members with a financial safety net. So, it is imperative to opt for the best life insurance policy. However, apart from opting for the right life insurance policy, you also want to opt for an affordable plan. Follow the below-mentioned steps to find cheap life insurance in Dubai and across the UAE:
- Never buy insurance at the last minute. Take your time to find the most suitable life insurance; the first available option might be expensive for an insufficient cover! Give yourself plenty of time to consider the coverage you need against what’s available in the market.
- Maintain a healthy lifestyle: Most top life insurance companies require a medical test when a policy seeker enters the cover after some specific age or if the policyholder selects a high sum assured. The premium will be decided based on the health condition of the policy seeker. That’s why it is advisable to maintain a healthy lifestyle if you want good life insurance UAE at a low premium.
- Select Annual Premium Payment Option: Most life insurance companies in the UAE offer the flexibility of paying premiums monthly, quarterly, and semi-annually. Nevertheless, some of the life insurance companies levy extra charges on all of these premium payment options. That is why it is advisable to choose an annual premium payment option to avoid paying additional charges.
What are the Factors that affect Life insurance Premium
1. Your age
Your age is one of the first and foremost factors that providers consider when building your life insurance premium. Premium increases with age. The younger you are, the fewer chances you might have in getting a life-threatening disease, incident, or death. So it is less likely that the insurance provider needs to make a large pay-out to your family or guardian.
2. Your gender
Your gender is another determinant of your life insurance pricing. It is a fact that women, on average, live around five years older than men. Women in the UAE will usually receive lower (but often longer) rates as insurers see less risk involved.
3. How much you smoke and drink
If smoking and drinking are not a part of your routine or lifestyle, you may pay a lesser life insurance premium than someone who smokes and drinks.
4. Your health and medical history
Your current health and medical history are taken into account when determining your life insurance policy price. Insurers check for any pre-existing cases and serious conditions such as diabetes and high cholesterol, if you have had any operations or surgeries, and other health problems.
5. Your family’s medical history
Your family’s medical history is one of the factors that are out of your control. UAE life insurance companies are interested to know if your family has a history of cancer, heart disease, stroke, or other serious ailments that may also pose a risk to you, as some diseases tend to be hereditary.
A family history of certain medical conditions may be seen by policy providers as a risk, contributing to your premium rate.
6. Your job
Insurance providers usually charge a higher premium for those who are involved in risky professions. Suppose you are a UAE resident working in safer jobs such as a desk job as compared to industries where you are exposed to dangerous situations, machinery, and materials (construction workers, skydivers, etc.) or spend most of your time in the water, road, or air (seamen, transportation, pilots, etc.). In that case, your insurance is more likely to be less costly.
7. Your personal hobbies
If your hobbies include weekend excursions to the UAE mountains, skydiving, and other risky activities, this can make a difference in how much you pay for your life insurance.
8. Your number of dependents
If you live with your family in the UAE and depend on you, you will need higher coverage so that the pay-out will be enough to meet their needs in the event of your death.
With higher coverage also comes a higher premium
9. Your financial history
Your current financial history plays another role in determining your life premium. If you are not facing any financial problems regarding income, debts, and banks, your risk level will be lower, and chances are, your premium will be as well.
10. Your mode of payment
When you decide to purchase life insurance in the UAE, how and when you pay the rate can influence the policy costs. Payments made quarterly, twice a year, or even once a year might lower your overall premium rate.
Your age is one of the first and foremost factors that providers consider when building your life insurance premium. Premium increases with age. The younger you are, the fewer chances you might have in getting a life-threatening disease, incident, or death. So it is less likely that the insurance provider needs to make a large pay-out to your family or guardian.
2. Your gender
Your gender is another determinant of your life insurance pricing. It is a fact that women, on average, live around five years older than men. Women in the UAE will usually receive lower (but often longer) rates as insurers see less risk involved.
3. How much you smoke and drink
If smoking and drinking are not a part of your routine or lifestyle, you may pay a lesser life insurance premium than someone who smokes and drinks.
4. Your health and medical history
Your current health and medical history are taken into account when determining your life insurance policy price. Insurers check for any pre-existing cases and serious conditions such as diabetes and high cholesterol, if you have had any operations or surgeries, and other health problems.
5. Your family’s medical history
Your family’s medical history is one of the factors that are out of your control. UAE life insurance companies are interested to know if your family has a history of cancer, heart disease, stroke, or other serious ailments that may also pose a risk to you, as some diseases tend to be hereditary.
A family history of certain medical conditions may be seen by policy providers as a risk, contributing to your premium rate.
6. Your job
Insurance providers usually charge a higher premium for those who are involved in risky professions. Suppose you are a UAE resident working in safer jobs such as a desk job as compared to industries where you are exposed to dangerous situations, machinery, and materials (construction workers, skydivers, etc.) or spend most of your time in the water, road, or air (seamen, transportation, pilots, etc.). In that case, your insurance is more likely to be less costly.
7. Your personal hobbies
If your hobbies include weekend excursions to the UAE mountains, skydiving, and other risky activities, this can make a difference in how much you pay for your life insurance.
8. Your number of dependents
If you live with your family in the UAE and depend on you, you will need higher coverage so that the pay-out will be enough to meet their needs in the event of your death.
With higher coverage also comes a higher premium
9. Your financial history
Your current financial history plays another role in determining your life premium. If you are not facing any financial problems regarding income, debts, and banks, your risk level will be lower, and chances are, your premium will be as well.
10. Your mode of payment
When you decide to purchase life insurance in the UAE, how and when you pay the rate can influence the policy costs. Payments made quarterly, twice a year, or even once a year might lower your overall premium rate.
How to Claim Life Insurance?
In case of a claim, the Policyholder shall send an intimation through a written notice within thirty days of the occurrence of any of the Events giving rise to a benefit. DNIR will process the claim once all claim documents are received
– Inform Your Insurance Provider
The first and foremost step in filing a claim for life insurance involves timely informing the insurance provider about the set of events that took place. In case the policyholder’s demise was accidental, it is crucial to provide each and every detail of the event to the insurance provider to assess and guide you through the entire process of filing the claim for the life insurance plan.
– Submit The Claim Form With The Documents
The second step in filing the claim for a life insurance plan, followed by informing the insurance provider, is submitting the claim form along with the required documents. A claim form is an official form provided by the insurance provider that contains fields and columns where information about the insurance provider is to be mentioned.
Along with the claim form, one needs to submit documents supporting their statements. The primary documents include the death certificate and other certificates issued by the medical institution if the deceased had gone through medical treatment. As these are vital in processing the claim further.
– Initiate The Process By Submitting Claim Form And Documents
The claiming process officially begins when the documents are submitted to the insurance provider along with the claim form. After filling the claim form and attaching all documents, the next step is to submit it to the provider so that the process can be initiated from their end. Once the insurance provider receives all the documents and the claim form, the reviewing process starts.
– Wait For The Claim To Be Processed
As mentioned earlier, once the insurer receives all the documents and the claim form, reviewing is started under which the insurance provider analyzes and assesses the authenticity of the documents and the claim. A team of doctors analyzes the certificates from the medical institution, and the death certificate, when given the go-ahead, is transferred to the billing division of the insurance provider.
– Receive The Claim After The Claim File Is Reviewed And Transferred to the company’s billing division, the process is almost complete. The billing division calculates the total payable amount and provides the death benefit to the nominee of the plan.
In case of a claim, the Policyholder shall send an intimation through a written notice within thirty days of the occurrence of any of the Events giving rise to a benefit. DNIR will process the claim once all claim documents are received
– Inform Your Insurance Provider
The first and foremost step in filing a claim for life insurance involves timely informing the insurance provider about the set of events that took place. In case the policyholder’s demise was accidental, it is crucial to provide each and every detail of the event to the insurance provider to assess and guide you through the entire process of filing the claim for the life insurance plan.
– Submit The Claim Form With The Documents
The second step in filing the claim for a life insurance plan, followed by informing the insurance provider, is submitting the claim form along with the required documents. A claim form is an official form provided by the insurance provider that contains fields and columns where information about the insurance provider is to be mentioned.
Along with the claim form, one needs to submit documents supporting their statements. The primary documents include the death certificate and other certificates issued by the medical institution if the deceased had gone through medical treatment. As these are vital in processing the claim further.
– Initiate The Process By Submitting Claim Form And Documents
The claiming process officially begins when the documents are submitted to the insurance provider along with the claim form. After filling the claim form and attaching all documents, the next step is to submit it to the provider so that the process can be initiated from their end. Once the insurance provider receives all the documents and the claim form, the reviewing process starts.
– Wait For The Claim To Be Processed
As mentioned earlier, once the insurer receives all the documents and the claim form, reviewing is started under which the insurance provider analyzes and assesses the authenticity of the documents and the claim. A team of doctors analyzes the certificates from the medical institution, and the death certificate, when given the go-ahead, is transferred to the billing division of the insurance provider.
– Receive The Claim After The Claim File Is Reviewed And Transferred to the company’s billing division, the process is almost complete. The billing division calculates the total payable amount and provides the death benefit to the nominee of the plan.
Step By Step Guide To Buy Life Insurance In UAE
Life insurance can form a vital part of your family’s financial stability and well-being but, if you’re like most people, you may find the thought of shopping for the right type of coverage a little daunting. Fortunately, these eight simple steps can guide you along the way, while FinBuddys.com is always there to assist you at every step:
Life insurance can form a vital part of your family’s financial stability and well-being but, if you’re like most people, you may find the thought of shopping for the right type of coverage a little daunting. Fortunately, these eight simple steps can guide you along the way, while FinBuddys.com is always there to assist you at every step:
1. Determine Whether You Actually Need Life Insurance
Almost everyone needs life insurance, but if no one is dependent on you financially, you probably don’t need life insurance if you have no debt and would leave an estate with enough cash to pay its own taxes and expenses. If you do not meet these criteria, you probably will need individual life insurance.
2. Calculate How Much Life Insurance You Need
There are two important questions to ask:
What Financial Resources Will be Available to Survivors After Your Death?
For simplicity, consider three categories of resources:
(1) Social security and other retirement-related survivor benefits
(2) group life insurance
(3) other assets and resources
It is also important to know when these resources will become available
What Financial Needs Will Your Survivors Have After Your Death?
(1) Final expenses
(2) Debts
(3) Income needs
Then subtract your survivors’ financial resources (step #2) from their financial needs (step #3) to determine how large a policy to buy. Many people are underinsured, often because they skip these steps or take a shortcut (such as simply buying a multiple of annual income). For more help in determining the right amount of life insurance, connect with your FinBuddys or drop us a message on FinBuddys.com
3. Consider Other Objectives You May Have For Your Life Insurance
Some types of life insurance policies include a savings feature that can be used for purposes other than paying death benefits. For more details, fill the form, and your FinBuddys will help you find the most suitable life insurance plan for you.
4. Determine What Type Of Life Insurance Best Meets Your Needs
Essentially, there are three types of life insurance policies—term life, whole life, and universal life. If you need the insurance for only a specific period of time or are on a limited budget, a term policy with lower premiums may be a good fit. If, however, you need the insurance for as long as you live and want to accumulate savings, a whole or universal policy may be a better choice.
5. Find Out If You Need To Add Any “Riders” To The Policy
There are two that you should consider—waiver of premium and guaranteed insurability. Some policies come with one or both included with the basic contract, but if not, it is generally a good idea to add them. Waiver of the premium pays the life insurance policy premium for you if you are disabled. Guaranteed insurability allows you to add to the death benefit without providing additional evidence that you are in acceptable health.
6.Shop Around
There are many ways to save money when buying life insurance, but they don’t always entail paying a lower premium immediately. That said, life insurance is a very competitive business so quotes can vary significantly between providers. We at FinBuddys.com are partnered with all the leading life insurance providers and will ensure that you have the most suitable life insurance cover in your given budget
7. Decide Whether To Pay Premiums Annually
It is better to pay annually rather than in installments in most cases because there is often a relatively large additional charge for paying smaller amounts more frequently.
8. Tell Your Beneficiaries About Your Life Insurance Policy
Once the life insurance policy is issued, inform your beneficiaries of the insurance provider, where to find policy copy and any specifics about what you want them to do with the death benefit.
While it is rare for people to be unaware they are the beneficiary of a life insurance policy, it does happen, and you want to make sure that the benefits don’t go unclaimed
Eligibility Requirements For Buying A Life Insurance Policy:
These are the basic requirements of the life insurance companies in the UAE
- The applicants must be aged between 18 years to 75 years to be eligible for entering into an insurance agreement.
- The applicants must have a regular and reliable source of income.
- The policy seekers must be a resident of the UAE and should have documents in support of their residence
- Emiratis can opt for life insurance UAE plans provided the fact they have relevant documents.
Documents Required To Buying A Life Insurance Policy:
An applicant needs to submit the following documents to get a life insurance policy in the UAE:
- Passport-sized photographs
- Emirates ID
- Passport with UAE residence Visa (for expats)
- Address Proof (utility bills)
- Bank Statement from the past three to six months
- Income Certificate
- Salary Slip