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Difference Between Life Insurance and General Insurance in UAE

By Neha Goyal
  | Published: 10 July 2020 | Last Updated On: 07 July 2021

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Insurance is a financial coverage provided by an insurance company for your losses in exchange for monthly, annual, or one-time lump-sum premium. Various kinds of insurances are offered by insurance companies to safeguard monetary losses. Insurance can cover anything from life to home to car to health to anything. Some insurance companies provide the weirdest of insurances such as:

Change of Feet or Cold heart insurance

A wedding is an expensive affair. In case if the bride or groom decides to not go ahead with the marriage, this insurance pays for all the expenses borne by both parties to arrange the wedding so that you can part ways without financial losses.

Alien Abduction insurance

Some people scared of aliens have purchased this insurance to safeguard them in case of alien abduction. The UK-based insurance company has sold over 30,000 of these policies across Europe.

…and many other… However, the most popular insurances are Life insurance and General insurance.

Life Insurance

Life insurance is a financial cover that provides coverage to your family in case of your untimely demise. When you purchase life insurance, you agree to pay the insurance company a certain amount refers to as a premium on a monthly or annual basis in exchange for a life cover. This life cover is a pre-decided amount that the company will pay to your family if you pass away during the term of insurance. In case you outlive the insured tenure, the company may return the amount with interest to you. If you have chosen the term life insurance, then the company is not obligated to return any amount to you. However, the coverage span of term life insurance is much more than regular life insurance.

Types of Life Insurance:

Term Life Insurance Plan

Term life insurance plan ensures that your family does not suffer in case of your untimely demise by covering any life risks. In case of your untimely demise, the company will pay your family a lump sum amount. The premium of term life insurance plan is lower than other types of life insurance plans and the sum insured is much higher. However, the premium of term life insurance increases with age. You are advised to buy a term life insurance plan at a young age to retrieve maximum benefits at a low premium.

Endowment Life Insurance Plan

An endowment life insurance plan offers the benefits of both life insurance and investments. The insurance provider uses some part of the premium to insure your life and the rest of the amount is invested. If during the insurance tenure, the policyholder passes away, the insured sum will be given to the nominee. If the policyholder outlives the tenure, the maturity amount will be given to them with interest.

Whole Life Insurance

Whole life insurance is the longest insurance cover that insures the policyholder for the rest of their lives till the premium is being paid. If you are looking to remain insured for the rest of your life, you should consider purchasing this type of insurance.

ULIP (Unit Linked Insurance Plan)

ULIP plan divides your premium between life insurance and market investment. This type of plan is extremely beneficial if you are looking for a plan which gives you high returns while insuring your life against any risks.

Money-Back Plan

The money-back is a life insurance plan that resembles the endowment plan. However, in the money-back plan, the policyholder receives monetary returns in regular intervals. Let us say that you purchased a policy 20 years. Your insurance provider will return you a fixed amount every 5 years. The bonus of your insurance will be given to you at the end of your policy.

General Insurance

Any insurance except life insurance is referred to as general insurance. General insurance includes vehicle insurance, home insurance, health insurance, marine insurance, or any other insurance. However, general insurance works same as the life insurance. When you purchase general insurance, you and the insurance company mutually agree to the amount that will be covered by the insurance company. Based on the sum insured, the company will decide the amount of your monthly, annual, or one-time lump-sum premium.

Types of General Insurance:

  • Health Insurance
  • Motor Insurance
  • Travel Insurance
  • Home Insurance

Health Insurance

Health insurance is a type of general insurance that provides you financial assistance for your medical expenses in case of illness. The insurance provider will compensate the amount for treatments or surgeries. According to experts, health insurance must be an integral part of your investment since it safeguards your financial interests in case of an illness which otherwise may drain your entire savings.

Motor Insurance

Motor Insurance, also known as car insurance and vehicle insurance, is a type of general insurance that provides financial cover for your car in case of any damage or bodily injury to a third party. You can also opt for comprehensive car insurance to cover your damage and bodily injuries bear by you in case of any car accident.

Travel Insurance

For all the explorers who often visit abroad for business trips or vacations, travel insurance covers your finances during your travel. Travel insurance includes coverage for loss of passport, travel inconvenience, flight delay, luggage delay, or any other travel-related problem. The most significant cover included in travel insurance is the cover for medical emergencies that allow you to receive the needed medical care even in foreign conditions.

Home Insurance

Home insurance is coverage that secures your home and the material inside your home. You can insure the structure of the home and all the goods inside the home. Even if you are a tenant, you can purchase home insurance to protect your possessions such as electrical equipment, furniture, etc.

Comparision Between Life Insurance vs General Insurance

Life Insurance

General Insurance

  • Covers only life-risk
  • Covers all insurances except life insurance
  • The insured sum is provided to your family
  • The insured sum is directly given to you
  • The sum of premium is returned with interest
  • No amount will be returned in case of no claim
  • Long term
  • Short term
  • Paid annually
  • Paid annually or lump sum

Finding Insurance

Whether it is life insurance or general insurance, you are advised to check and compare insurance online to find the best life insurance in the UAE. To find the best life insurance in the UAE, you can check the life insurance plans at each bank’s webpage and decide is the best life insurance for you. However, this can be a lengthy and tedious process. You can save your time and energy by comparing insurance plans online to find the best life insurance plan in the UAE. All you need to do is:

  • Visit policybazaar.ae webpage
  • Fill in the e-form with your details
  • Policybazaar.ae will provide you the best life insurance plans according to your needs