Here’s Why Expats Should Consider Term Insurance in the UAE

  | Published: 20 November 2019 | Last Updated On: 08 February 2021

Buy a term plan and secure your family

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Term Insurance in UAE
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Dubai, one of the 7 emirates of UAE, welcomes hordes of expats every year. Be it business or job, the place is the hub for cross-cultural opportunities to explore. Having said that, the lifestyle being followed here can be expensive equally. And it can be difficult for a person with a strict budget to manage with these expenses, especially if you’re the breadwinner of the family. Here comes term insurance into the picture, which is designed in a manner keeping the financial needs of your family.

Life being uncertain, you can’t have a hold on the ill-fated. What you can do is to be prepared for this. Buying term insurance is a step forward to this that helps you to mitigate financial hardship in time of a crisis.

Let’s Decode Term Insurance!

Term insurance is the most basic type of insurance that covers the family in case of the untimely death of the insured. It goes without saying that, in the event of the sudden demise of the sole bread earner, a huge financial burden will be on the family, starting from paying those EMIs to regular household expenses. With term insurance, you can plan for those rainy days, to secure the financial future of your family, even in your absence.

Reasons for Expats to Buy Term Insurance in the UAE

As an expat, your reasons for considering term insurance in the gulf country include:

  • Term insurance is the simplest way of securing the financial future of your family, at a pocket-friendly price.
  • The cost of living can be quite exorbitant in any of the emirates. In your absence, the financial burden on the family can be alleviated up to a certain level through term insurance.
  • Apart from death cover, the policy also covers the insured for disability owing to an unfortunate event such as an accident.
  • There are insurers that offer the facility of buying the policy at multiple currencies as well.
  • Acts as a source of income in case of accidental disability of the breadwinner leading to loss of income to the family

Above all, one of the major reasons for buying term insurance in the UAE for the expats is that home country term insurance will settle the reimbursable money in a home country bank account only. For that matter, any emergency that occurs in the host country can’t be covered. Moreover, considering the difference in the currency, having local term insurance comes with added benefits. It can be less expensive than buying car insurance.

Let’s say-term insurance of AED 500,000 (half a million dirhams) for a 35-year-old is priced at roughly AED 500 (just 40 dirhams a month). That is less than half of what you’ll pay for your car insurance. However, expats should consider their priorities and analyse the needs of buying insurance. The perspectives may vary from one person to another.

Tips to Buy Term Insurance in the UAE

The following tips may go in the long run in ensuring the right term insurance:

  • Choose Wisely: It is important to analyse your insurance needs first and then buy. You should consider the number of dependents at every stage of your life. Moreover, financial responsibilities tend to vary at different stages. Hence the cover amount should be selected accordingly.
  • Consider the Current Lifestyle: While choosing the cover amount, keep the current lifestyle of your family in mind to determine how much the family requires to maintain the same in the future.
  • Add the Liabilities: Working individuals are often under the burden of liabilities such as EMIs, education fee of kids’, car loan, home loan etc. To prevent the burden of EMI payments falling on the family after you, it is advised to include the repayable amount in the life cover availed.
  • Higher the Claim Settlement Ratio the Better it is For You: An insurance provider with a higher rate of claim settlement ratio means there are less chances of your claim getting rejected. A company with a good market reputation always live up to their promise to offer monetary help in the hour of need. Hence, buy a policy only after you have verified the market status of the insurer. In this regard, Noor Takaful, Salama Insurance, Takaful Emarat, Orient Insurance etc. are to name a few insurers that offer term insurance with extensive benefits.

The Bottom Line!

As the motive should be to save more on your pocket, if you are living for a tentative duration, it is recommended to buy term insurance in your home country as well as in the UAE. Despite the NRI insurance segment offers term insurance up to a term of 40 years, in order to secure the later age of a person after returning from UAE, with a local UAE based term plan, you can secure your expenses while working in this gulf country.