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5 Features of Purchasing Affordable Term Insurance

By PolicyBazaar

Buy a term plan and secure your family

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Published: 28 October 2020Last Updated On: 08 February 2021

AED 100,000 cover starting at just AED 7/month

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Term Insurance plans are the most basic and affordable form of insurance products available not just in the UAE, but all across the globe. These plans are meant to mitigate the degree of risk associated with one’s life. The best part about term insurance plans is that by paying a small premium one can get a high coverage amount.  

In case the policyholder passes away within the period of the policy the nominees are entitled to receive the death benefit. Contrary to this if the policyholder surpasses the policy period there is no payout as these plans offer no maturity benefit. With progressing technology purchasing term insurance has never been as easy as it is now. With a click of a button, you can discover and compare thousand of plans and providers and choose the one that suits your budget and needs. 

While purchasing term insurance it is vital to understand your needs in the first place followed by comparing different plans and providers analytically. With the market being filled with numerous providers it becomes difficult for buyers to choose the right term insurance plan. In order to help you, we’ve come up with a new blog where we will be shedding light on 5 features of purchasing affordable term insurance in the UAE

Before we go ahead and dive deep into the nuances of purchasing affordable term insurance in the UAE, let us first take a look at the key features that affect the price of term insurance plans in the UAE- 

Features Affecting Premium of Term Insurance 

Here’s a quick rundown on the features that affect the premium of term insurance plans in the UAE-

  • Age: The first and foremost feature that affects the pricing of term insurance plans in the UAE is the age of the applicant. According to the thumb rule age of the applicant is directly proportional to the premium of the term insurance plan. In fact, not just for term insurance for almost every insurance-related product age of the applicant plays a crucial role. Typically, one should try and purchase the required insurance plan as early as possible in life as one will have to pay lesser in comparison to purchases made later in life. 
  • Gender: Insurance providers determine the premium of an insurance plan by assessing the life expectancy of an individual. According to statistics and medical science, women tend to live more than men and this is why they have to pay a lesser premium in comparison to men. Considering the fact some of the insurance providers offer special discounts on their products and plans if the buyer is female. 
  • Income: The annual income of an individual is another key factor that helps in determining the premium of an insurance plan in the UAE. Usually, the sum assured by the provider is near about 15 to 20% more than the annual income of the buyer. 
  • Risk Profile: Different occupations have different profiles of risk associated with them. When you buy a term insurance plan the provider assesses the risk profile to determine the premium of the plan. People involved in occupations that have high degrees of risk end up paying more premiums than people in professions with low risk. Forex: An engineer involved in civil construction will have to pay a higher premium than a government officer who has an office job. 
  • Drinking and Smoking Habits: Smoking and drinking have been associated with poor health and low life expectancy. Considering the fact smokers have to pay higher premiums for the same cover than non-smoker as they are at a greater risk.  

Top 5 Term Insurance Plans in the UAE

The top term insurance plans in the UAE are as follows-

Provider Maximum term Riders

Zurich (International Term Assurance)

35 years

Available

MetLife (Live Life)

25 years

Available

Friends Provident Fund (IPME)

30 years

Available

LIC Healthee Term

35 years

Available

Salama (Hemaya)

35 years

Available

Factors to Consider while Purchasing Term Insurance

Some of the important factors to consider while purchasing term insurance in the UAE are as follows-

  • Claim-settlement ratio: CSR also known as claim settlement ratio is an important factor, it denotes the number of claims settled by the provider against the number of claims filed. 
  • Riders: Auxiliary riders are add-on covers that can be purchased with the basic plan to enhance the protection quotient of the term insurance plan in the UAE. Some of the most common term insurance riders are waiver of premium, accidental death benefit, etc.
  • Payable premium: This obviously is one of the crucial factors, one should not look for cheap plans but plans that fulfil their needs at the right price.  

In a Nutshell

Term insurance plans are an absolute must for everybody as they help one to secure the future of their loved ones at affordable prices. Moreover, they are readily available which makes them the right choice. While purchasing term insurance plans make sure you compare different plans before making your mind.