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5 Benefits of Buying Long-term Term Insurance in UAE

By PolicyBazaar
  | Published: 30 May 2020 | Last Updated On: 08 February 2021

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In this new era, investment trends have changed quite a lot. Nowadays, people prefer getting married at a later age, having children even later. Above all of this, are the home loans that entirely revolve over the age for retirement. However, the liabilities you have and the responsibilities towards your beneficiaries usually do not necessarily end once you are 60 years old or reach the threshold of the retirement age. This is the reason behind many people in today’s age opt for long-term term insurance in UAE.

However, the choice of the duration of the policy still rests in your hands. You can choose any policy term that suits your needs and requirements. Considering the death benefit offered by term insurance in UAE after the demise of the policyholder during the tenure of the policy, it makes sense to opt for long-term coverage for the applicants that are young.

Nowadays, coverage for term insurance in UAE is offered by the providers for longer tenures that go up to almost 85 or 100 years depending on the company. If you are the sole income earner for your family, then you should consider opting for long-term term insurance in UAE. However, before going ahead and doing so, you need to know how to choose the best term insurance policy to suit your financial long-term goals and the downside of opting for the same. Hang on to this brief guide!

Factors to Consider While Choosing a Long-term Term Insurance in UAE

The following are the ways by which you can opt for adequate long-term term coverage:

Duration of the Policy

When you are out there seeking to buy a term plan, it is a pre-requisite to take into consideration the tenure for which your policy coverage will last. The term of the policy usually varies from one company to another. It is good to make sure that the tenure of the policy works well with your current financial condition, future goals, and your age.

Long-term term insurance in UAE is usually better than a short term plan as the tenure of the policy lasts for a longer time at a constant premium that leads to more savings for you.

Compare the Premiums on the Term Insurance Policies

When you are opting for long-term term insurance in UAE, you should opt for the option that serves your financial goals for the future well. There is an endless range of options that are available for a policy seeker in the market, but it is important to choose the one that works best for you. Since you are considering opting for a policy tenure that is long-term, it is essential for you to thoroughly compare the premiums charged by the different providers on the term plans, and then go ahead with the payment.

Consider Your Income

One of the most essential factors that you need to take into consideration is your ability to pay off the premiums on your policy for the next, say 50+ years. So, think about your current income, savings, potential increments, inflation, along with the scope of your income’s growth in the future in order to be able to meet your premium payments after, say 20 years. Hence, you should be certain that your income is sufficient for you to continue with your term plan. Otherwise, you can avoid opting for a policy with high premiums.

Your Health Condition and Your Age

These are small yet quite important factors that one needs to consider. When opting for a term policy, you need to consider the condition of your health and your age. However, it makes more sense to opt for long-term term insurance in UAE at a young age to ensure higher savings in the future. So, before buying a term plan, consider your age and any health conditions you might have because someone with serious health conditions might not qualify for long-term term insurance in UAE.

Financial Goals for the Future

Many people opt for term insurance in UAE for over 40 years to ensure that they are able to fund their future financial goals such as a child’s further education, a child’s marriage, have a smooth post-retirement age, among others. So, when you opt for coverage based on your future goals, do not forget to factor in inflation. You need to opt for an amount that is sufficient to cover the current lifestyle of your dependents if you are not around.

Financial Advice

You can consider taking advice from an expert before you go ahead and commit for long-term term insurance in UAE for your chosen duration. Take into consideration the pros and cons before going ahead and making the payment. You can request the professional to guide you through the different plans and premiums along with the duration and then opt for the one as per your needs and requirements.

The Downside of Buying Long-term Term Policies

It is obvious that opting for long-term term insurance in UAE would mean honoring premium payments for a longer tenure, as you will be required to make the payments regularly during the entire policy duration. But, is it feasible and worth to pay the payments all those years?

Opting for a long-term term plan would mean for you to make regular payments for the entire tenure that may have some downsides to it, such as the ones mentioned below:

Post-Retirement Liability of Paying Premiums

If you opt for a plan that offers coverage for up to 85 to 100 years, you will be required to make the premium payments even after your retirement, which will be an added expense during that period. So it can be difficult to honor the payments if you do not have a constant source of income since you have to pay these premiums regularly.

High Chances of Lapse of Policy

In the case of you having to pay the premiums for such a long tenure, there are chances of you ending up missing your payment during your retirement age. In case of non-payment of premium, your policy will lapse, causing a loss for the entire premiums you have paid over the course of the years.

Wrapping it up!

Above are the parameters that will help you opt for sufficient term insurance in UAE. Once you are certain about opting for the policy, you will be able to secure your beneficiaries without stressing about future payments.