8 Reasons Why You Must Buy a Term Life Insurance in UAE
People across the UAE are gradually realizing the importance of having a life insurance policy. With life increasing its pace as well as uncertainties rising with each passing day, every family must opt for an apt life insurance cover that entitles them to deal with the loss of loved one of course, not emotionally but at least financially.
In order to meet the rising demand for life insurance, several life insurance companies in the UAE are offering different types of life insurance plans that suit the different needs of different people. This is the main reason why sometimes it is tough to opt for the right plan in such a complex marketplace. Well, if you are also one of those people who want to buy a life insurance policy but you are confused about which plan you should choose among all, then buy a term life insurance without giving a second thought.
Term insurance policy is the most basic, cost-effective, and easy to purchase a life insurance policy that offers financial protection to your loved ones specifically in an event of your untimely demise. Basically, the insurance provider offers the sum assured as a death benefit to the beneficiary(s) if, in case, the policyholder passes away during the tenure of the term life insurance plan. However, if the policyholder outlives the policy term, no maturity benefit is offered. In short, a term plan offers you complete peace of mind by ensuring that your loved one’s financial needs will be taken care of even in your absence.
Now, read this article further to know the reasons why you must buy a term life insurance in UAE.
1. Easy to Understand
While other life insurance policies such as the Unit-Linked Insurance Plan (ULIPs) and endowment plans are a little much complex to understand, term life insurance is far easier to understand. Usually, there are many aspects included in life insurance policies such as calculation of risk, saving component, death benefit, cash value savings, policy loan repayments, and much more. But when compared to all other life insurance plans, a term plan is indeed very easy and simple to understand. Reason being, it only asks you the term for which you would like to be covered and for that term, you are asked to pay the premium to avail the benefit of a term plan. That’s all you need to do from your end while opting for the basic term plan.
2. Financial Protection
This is the key reason why people buy an insurance plan. The demise of the sole breadwinner of the family can flip the life of remaining members of that family upside down. In such circumstances, managing household expenditures and taking care of the basic financial requirements becomes a daunting task for them. That is where term life insurance comes into the picture. It ensures financial protection by offering sum assured as a death benefit to the beneficiary(s) and can help the remaining family members financially in times of need.
3. Protect the Future
Every sole breadwinner of the family has certain obligations and responsibilities towards his/her parents, spouse, and children. But untimely demise may significantly prevent you from fulfilling those responsibilities. With term plans, you can plan your future accordingly. In an event of your unfortunate demise, the sum assured from the life insurance company will ensure that your children will able to complete their further education and have funds for their marriage as well. Just like that, your parents and spouse will also be able to meet their financial needs in your absence with an apt term life insurance in UAE.
4. Debt Repayments
Most of the individuals opt for a loan in their lifetime to meet their certain types of needs. It can be a home loan, car loan, education loan, or personal loan. Upon the untimely demise of the policyholder, family members can make the loan repayment by using the amount that has been given by the insurance company. Thus, the financial burden of these borrowings does not fall upon your loved ones by opting for an apt term plan.
5. Affordable Premiums
Since there is no investment element involved in the insured amount, the premium for term life insurance is comparatively much lower than other life insurance plans. Any individual who opted for a term plan might have to pay about 1% of his/her annual income in order to avail a life cover. That is what makes it the most affordable life insurance plan.
6. High Sum Assured
Life insurance companies provide a large sum assured to the beneficiaries due to the absence of the survival/maturity benefits and some other complexities. Henceforth, this high sum assured can protect your loved one’s financial needs in an event of an unforeseen eventuality. When buying a term life insurance in UAE, be sure you consider your financial requirements, liabilities, investments, debts, and other financial goals so that your loved ones can easily deal with financial distress in your absence.
7. Option to Buy Riders
People buying a term life insurance in UAE can also buy riders in order to modify their existing term plan by paying an extra premium cost. Riders are basically the additional benefits that come with a term insurance policy to order to meet the different needs of an insured. Some of the most famous riders that come with the term plan include the Critical Illness Rider, Waiver of Premium Rider, Accidental Death Benefit Rider, Income Benefit Rider, Accidental Death & Disability Benefit Rider, etc. While the types of riders that are provided by the life insurance company will generally vary based on the plan type, there is as such no restriction to the number of riders that you can opt for.
Moreover, it is suggested that you should customize your basic term plan with riders because it offers you an enhanced coverage without letting you facing a hassle of buying and maintaining multiple term plans.
8. Customizable Policy Period
When buying a term plan, you can select a policy period from 5-30 years in the majority of the cases. Well, you can choose a term plan with a policy period that suits your exact insurance requirements. For instance, if you are a 30-year old individual who is looking to buy an apt term life insurance in UAE that can offer you a cover till your retirement then you can buy a term plan with a 30-year policy period. However, it is always suggested to buy a term plan with long policy tenure because your premium rate will rise every time you renew your term life insurance policy.
The Bottom Line
Now you must have read enough reasons to opt for a term life insurance in UAE. So, if you are also a sole breadwinner of your family then opt for a suitable term life insurance to protect your loved ones financially even in your absence. It is a sensible decision that you can make especially when life is very predictable and uncertain.