What is Life Insurance? Types & Best life insurance plans in UAE

What is Life Insurance? Types & Best life insurance plans in UAEPolicybazaarAverage Rating / 5 ( reviews)
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Once you have moved abroad, found the ideal job, made good friends and started the enjoyment of your life an expat in UAE, there are many things that are important to think about. However, one of these things is extremely significant and should be addressed rather sooner – do you have a life insurance plan?

Especially, if you are living away from your home country, being the breadwinner of the family it is important to lay down a financial safety net for your loved ones. There are a variety of life insurance plans for expats in the UAE.

What is Life Insurance?

Life insurance is a contract between the insurance provider and the holder of the policy in which the insurer guarantees a payout in the form of a death benefit to the nominee stated in the policy contract upon the untimely demise of the policyholder. This death benefit offered by the insurance provider is in return for the premium payments made by the insured.

The purpose of life insurance is to provide financial protection to your dependents when you are not around. It is important for you to carefully analyze your financial situation and the lifestyle needs of your family before buying any of the life insurance plans for expats.

Many insurance providers also allow customers to customize their policies in order to enhance the scope of their coverage by adding riders to their plans. There are a variety of riders available varying as per the provider. Some of the riders offered are accidental disability benefit rider, waiver of premium rider, accidental death benefit rider, among many more.

Understanding Life Insurance for Expats

If you are an expatriate working and residing in a different country for career prospects, better lifestyle and remuneration it is vital to understand the importance of life insurance. As explained earlier the purpose of life insurance is safeguard and protect your loved ones during financial hardships that might have been caused due to the loss of the breadwinner of the family.

Life insurance for expats ensures that your family is financially secure in case of any unforeseen event. Getting life insurance plan for expats becomes even more vital because in several cases their families tend to live in the native country completely dependent on the breadwinner. In such a scenario, one should be well-prepared with the right expat life insurance that will replace your income during the strokes of uncertainties.

Types of Life Insurance                                

There are different variants of life insurance available in the market due to the diversified population. Below mentioned are the most common types of life insurance plans for expats that you can buy:

Term Life Insurance

This type of life insurance is simple and plain. Under this, you choose a fixed period for which you want coverage and pay the premiums for each year. There is no savings component involved in such a plan. When the term of the policy ends, you no longer have to make premium payments and the coverage offered to you ends. The pro of a term insurance plan is the pricing as it is offered at economical premium charges, whereas the con of holding this insurance is that it provides cover for a limited period.

Whole Life Insurance

This insurance policy covers your entire life as long as you fulfill the premium payments. It provides you with a death benefit along with an accumulated cash value which is guaranteed to grow each year. The advantage of this plan is that you can borrow cash against it in emergency situations, whereas, the disadvantage of this plan is the higher premium charges as compared to a term plan for similar coverage amount.

Endowment Plans

These are somewhat similar to the term plans, the major difference being the maturity benefit. Unlike the term plans that pay only in case of an eventuality, these plans payout in both cases – death and survival. The perks of holding these plans are that it is both an investment and insurance. On the contrary, they charge higher premiums as compared to term plans.

 There are two types of endowment plans, such as:

  • Unit linked insurance plans (ULIP)
  • Money-back policies

Others

There are few other options for life insurance plans for expats such as:

  • Pension Plans: Such plans are designed to help you build a retirement plan. in case of an unfortunate situation, the nominee can receive a lump sum or regular pension payments for the rest of the tenure of the policy.
  • Universal Life Plans: These plans allow you to customize your policy. You can include investment options or various riders such as income protection rider, accidental death benefit rider, etc. in your policy.

Emirati Life Insurance vs. Expat Life Insurance

Emirati Life Insurance

Expat Life Insurance

Less expensive in comparison to expat life Insurance

Costlier than Emirati Life Insurance

Comes with higher maximum loan amounts

Comes with lower maximum loan amounts

Flexible repayment tenors

Shorter time span for repayment

Only UAE nationals are eligible

Only expats are eligible

 

Pricing of life insurance plans in based on the concept of risk analysis. When an insurance provider quotes the payable premium to the customer for a specific plan, it is after rigorous assessment and analysis. Typically, the provider looks upon several factors such as income, lifestyle habits, health, medical history, type of occupation, etc. and determines the overall degree of risk. Once the risk assessment is complete modern-day computer programs and algorithms are used to get the payable figure. The payable premium is directly proportional to the degree of risk, that means higher the risk higher will be premium.

Life insurance for expats in UAE are generally priced higher than plans for Emirati’s due to the risk profile and numerous other factors. The current era has emerged truly as ‘the era of globalization’ as a result of which there has been an exponential increase in the demand for quality private health care internationally. Moreover, the high cost of private high care systems in foreign countries are some of the major factors. The regulations on insurance providers along with stringent norms of insurance licensing are some of the other contributing factors that result in higher pricing of expat life insurance plans.

Best Life Insurance Plans for Expats in UAE

Here’s a quick rundown on some of the best expat life insurance plans.  The top life insurance providers and plans across the UAE are:

Provider

Life Insurance Plan

Cover

Mashreq Whole Life Insurance
  • Joint coverage, flexible payment options, Add-on riders
Citibank Life Long Protection
  • Death benefit, Joint Coverage, Acts as income replacement

Salama

Integra Global Expat Insurance

  • Joint coverage, flexible payment options, Add-on riders, Death benefit

Union Insurance

The Sure Term International Life Insurance Program

  • Death Benefit
  • Global Coverage
  • Coverage up to 10 years

Noor Takaful

Pure Protection Plan

  • Primary Takaful Cover
  • Additional cover such as critical illness, permanent total disability, accidental death, and takaful contribution waiver.

Life Care Plan

  • Death Benefit
  • Additional cover such as critical illness, accidental death, permanent total disability, and takaful contribution waiver.

Alliance Insurance

Whole Life Insurance

  • Level Premium Whole Life Plan
  • Limited Payment Whole Life Plan

Term Insurance Plan

  • Tenure ranging from 10 to 30 years
  • Or until the age of 65 or 70 years

Salama

Hemaya Plus Term Plan

  • Affordable
  • Customization of the plan with riders such as accidental death benefit, permanent total disability, and much more.

Hyat Plus Whole Life Plan

  • International Coverage
  • Up to the age of 100 years
  • Entry age 18 years
  • Maximum age of 74 years

Hyat Superior Whole Life Plan

  • No nil allocation period
  • Age between 18-74 years
  • Maturity at 100 years

 

Over to You!

It is extremely important to do deep research and seek the advice of an expert, family or friends before locking down any insurance plan. However important it is to hold any of the available life insurance plans for expats in UAE, it comes to waste if the plan does not cater to your requirements and needs.

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