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Life Insurance provides your family a financial cover in case of a bread winner’s untimely death. When you purchase life insurance in the UAE, you agree to pay the life insurance company a pre-specified amount in the form of premiums. The insurance company thus agrees to provide life cover in exchange for this premium. This premium amount varies according to the life cover you purchase.
There are usually five types of life insurance in the UAE. Among these, some of the plans do not return the life insurance premium you pay over years to cover your life However, some life insurances return the premium paid on the life insurance. These include Endowment Life Insurance Plan, ULIP, and Money-back plan. However, the premium on such life insurance in the UAE is higher than life insurance that does not return the premium.
The return of premium of life insurance works according to the nature of the life insurance policy in the UAE. Generally, the mechanism follows the same pattern where you, as the policyholder, pay the premium to the company. You will be required to pay this premium up to the term of the insurance. Let us say that you purchased life insurance of AED 400,000 for 20 years at the premium of AED 530. Then, you will be required to pay AED 530 annually to continue the life insurance for 20 years. After 20 years are completed, your life insurance provider will pay out the amount with some interest. In case you miss a payment for more than six months and your policy lapses, the benefits received on the life insurance will not be applied which means in case of your demise, your family will not receive any money. On the other hand, if you pass away during the tenure, the entire amount of life cover is paid to your family.
However, each life insurance plan works differently:
Endowment Life Insurance Plan |
ULIP |
Money-back plan |
---|---|---|
Lower Interest rate |
Higher Interest Rates |
Medium to low interest rates |
No Market investment |
Market Investment |
No Market Investment |
Returns the entire amount at the termination of the life insurance plan |
Returns the entire amount at the termination of the life insurance plan with bonus and high interests |
Returns money in regular intervals |
To ensure that your life insurance continues to offer you life cover, you must pay your premium regularly.
Usually, when you purchase life insurance, you pay the bank to safeguard your family’s financial condition. This works well in case of your untimely demise. However, in case you outlive the tenure of your policy, the amount remains with your insurance provider which they might use to reimburse another party in case of need. Many policyholders hesitate while investing in regular life insurance because their investment to cover their life is futile after their tenure. The life insurance premium paid to the company remains with them. Under such circumstances, several investors turn towards life insurance in the UAE that returns the premium. Here are some of the benefits of this type of life insurance:
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Although this kind of life insurance repays your premium, there are some drawbacks with life insurances that return premium:
According to the UAE insurance authority, 62 insurance companies are operating in the UAE. These consist of 35 National insurance companies and 27 international insurance companies. However, some of the best insurance providers in the UAE that offer a return of premium of life insurance are:
To check, compare, and choose the best premium-returning life insurance quotes visit policybazaar. ae.
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