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How to Buy Term Insurance that suits your Requirements?

By PolicyBazaar

Buy a term plan and secure your family

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With the evolution and expansion of the insurance sector within the past couple of years in the UAE, there has been a substantial rise in the number of companies offering insurance production. The increase in the number of providers has led to a competition that is highly beneficial to the buyer’s perspective. In order to expand individual market share and revenue in a highly competitive market, insurance providers are offering products at lower prices. 

Term insurance plans are one of the most basic and simple insurance products available in the market. Traditional term insurance plans are highly flexible and affordable when compare to other insurance products. There are a plethora of insurance providers in the UAE that offer customized term insurance plans to safeguard the future of your family and loved ones. 

While going through term insurance quotes from different providers, it becomes extremely baffling and confusing for insurance seekers to choose the plan that suits their budget and fulfills all their requirements at the same time. Selecting the right term insurance plan in the UAE involves different factors that determine the term, coverage, and riders of the plan. To make sure that you choose the right term insurance plan in the UAE, we’ve come up with a step by step approach in order to help you to safeguard your family’s future. 

Step 1: Assessing your Needs

The primary objective of buying a term insurance plan is to provide financial cushioning to your dependents when you are not around to take care of their needs. Insurance seekers should firmly assess the monetary requirements of their dependents and choose a plan that is sufficient to fulfill the financial needs of your family in your absence. As a general thumb rule of the insurance industry insurance seekers should choose a plan that offers coverage equivalent to 20 times the current annual income of the breadwinner of the family. 

Furthermore, insurance seekers should lay emphasis on important milestones of life that one crosses during different phases. For instance, one should consider the educational expenses of their children, expenses for a child’s marriage, coverage for a spouse’s healthcare and pension while choosing term insurance plans in the UAE. 

Step 2: Research, Compare and Choose

Term insurance plans can be mainly classified into three plans i.e. basic term plans, term insurance plans with a steady flow of cash and term insurance plans with increasing income. The coverage, premium and eligibility criteria for all three types of plans are different.

The best and probably the most important step in choosing the best term insurance plan in the UAE is researching, comparing and choosing. Insurance seekers should begin with researching the internet followed by comparing providers and plans and finally choosing the right term insurance plan in the UAE. Researching and comparing term insurance plans ensures that you choose the best deal in terms of the payable premium and the sum assured. 

Step3: Check for Claim Settlement Ratio

Another important factor to be taken into consideration while buying a term insurance plan in the UAE is the claim settlement ratio of the insurance provider. The claim settlement ratio can be defined as the ratio of the total number of claims processed against the total claims received by the insurance provider. CSR is a vital factor and insurance seekers should not overlook the possibility of the provider not sanctioning the sum assured of the plan to the nominees. Higher the claim settlement ratio better is the credibility of the insurance provider and hence buyers should always prefer choosing insurance companies with high claim settlement ratios. 

Step 4: Don’t Forget Inflation

With the modernization and strengthening of economies all across the world, the probability of inflation has increased. Since most of the companies and firms work on a global scale, strokes of economic uncertainties can affect the lives of a common man to a great extent. Most of the insurance seekers lay emphasis on the age, premium and the coverage of the plan and do not consider inflation. During phases of inflation cost of living increases and income decreases which might affect the living standard and lifestyle of your dependents in your absence.

In order to counter inflation insurance seekers should choose adequate coverage amount so that their dependents and loved ones do not struggle for their financial needs. The adequate cover amount will ensure that your family and children continue to live the same lifestyle as they did while you were around to look after their needs. 

Step 5: Look for Additional Riders

Riders are additional features that can be added to the basic plan in order to enhance the utility and protection of the plan. Different insurance providers offer a wide variety of additional riders which make the basic term insurance plan stronger and diverse. Additional riders cover scenarios that are not covered in the basic term plan, for instance, permanent or total disability coverage, personal accidental coverage, etc. 

Key Features to Consider while Buying Term Insurance Plans

Value of Human Life

As mentioned earlier the primary objective of buying a term insurance plan is to cover the financial expenses of the nominees and dependents in your absence. Insurance companies very often refer to the term ‘Human Life Value’ and recommended buyers to get coverage equivalent to human life value.

Human life value or HLV can be defined as the total income of an individual coupled with outstanding liabilities like loans, debts, mortgage, etc.

Cost

It is a common fact that term insurance plans are the cheapest amongst all the insurance products. Insurance seekers should go for providers that offer the best features at the lowest premium along with adequate coverage. Furthermore, you can research and discover providers that offer term insurance plans at discounted prices.

Enhanced Coverage

Insurance providers offer a facility for enhancing the overall coverage of the term insurance plan during critical phases of one’s life. Due to the flexibility of term insurance plans in the UAE insurance seekers can the coverage of the plan by 25% to 50% depending upon different conditions.

Convenience

Amidst the plethora of different term insurance plans in the UAE buyers should look for plans that come with maximum innovation and flexibility. For an individual, the costs for insurance plans have minimized and the services have improved to a great extent. Thanks to the internet, buying term insurance plans in the UAE is as easy as it was never before. 

Conclusion

We understand that choosing the right term insurance plan amongst a wide variety of available options is an extremely time-consuming and tedious task. However, to reduce your hassle you can follow the steps mentioned in the article to get the best term insurance plan in the UAE.

With the right term insurance plan in place, you can ensure financial security for your loved ones and family during phases of financial instability. Furthermore, the utility of term insurance plans is not just limited to offering financial security, these plans offer peace of mind and a feeling of security not only to the insured by also to the dependents.