How to Find the Best Life Insurance Companies in UAE

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Life Insurance provides a financial cover to you and your family in the event of an unforeseen accident resulting in death or disability. Life is unpredictable as it is susceptible to the risks of death and disability due to natural and accidental causes. A sudden fatality can leave you helpless and cause a loss of income to the household.

Even though one cannot put a price on human life, having a steady flow of monetary support can help you and your family sail through rough waters. Life Insurance products provide a definite amount of money in the event of the untimely demise of the life insured during the term of the policy or if they are disabled on account of an accident. As a provider for your family, it is your responsibility to be prepared for the worst-case scenario.

What is the need for Life Insurance?

  •  To make sure your immediate family members have financial support after your sudden demise
  • To have a back-up savings plan for the future that offers a continuous source of income beyond your retirement
  • To ensure there’s some extra income even when your earnings face a  set back due to a serious illness or accident
  •   To finance your children’s dream and education
  •  To prepare you for other financial contingencies

Regulatory Body for Insurance in the UAE:

Putting your hard-earned money in the hands of an insurance provider might seem risky but fret not, the UAE has strict norms governing the insurance sector in the country to safeguard your earnings.

Insurance Authority

The Insurance Authority was entrusted with the task of supervising and regulating the insurance industry in the United Arab Emirates in order to foster a favourable climate for its growth and promote the crucial role of the insurance industry to fairly compensate persons, property, and liabilities against fraud; assimilate national savings and utilize them to support the development of the economy in the UAE; encourage fair competition; provide world-class insurance services with coverage at affordable rates, and achieve Emiratization of jobs in the insurance sector of UAE. 

The UAE government has recently announced that the authority for the regulation of the financial sector in the country will be transferred to a unified regulator and that the existing regulators in the country will be merged. The decision was publicly announced on July 5, 2020, when the government of UAE confirmed the merger of the two regulators- Insurance Authority (IA) and the Securities and Commodities Authority (SCA) under the supervision of the Minister of Economy, hoping that the unified regulator will develop a comprehensive and robust framework that brings transparency to the market of life insurance companies in UAE. 

Steps to Find the Best Life Insurance Companies in UAE

Consider the following before choosing a life insurance plan that suits your requirements:

1. Choose the type of policy that is tailored to suit your needs and budget

First and foremost, decide the type of policy that fulfills your needs. One size does not fit all. There are several different types of life insurance policies made available by the life insurance companies in UAE:

Term Life Insurance

This is the most basic and economical type of insurance policy that is curated to offer coverage for a specified term ranging from a minimum of 5 years to a maximum of 35 years. This term duration is clearly specified in the policy. If the life assured dies during the active duration of the term period, the insurance amount will be paid to the insurance beneficiary. In the event of the policyholder surviving the term of the policy, the insurance cover will be void without offering any value and no claim can be made. There is no investment or saving element to term life insurance as the core intention of the policy is to provide pure protection.

Whole Life Insurance 

The whole life insurance policy offered by Best life insurance companies in UAE are open-ended. The life cover continues throughout the lifetime of the life assured. Apart from the protection benefit, these plans also contain an investment element. Not only does it cater as a survival benefit to the holder of the policy but it also offers the option of partial withdrawals of the assured sum. To make it simpler, these policies also have a cash value benefit, which increases as time goes by. The policyholders can also remit payments beyond the scheduled sum of the premium to increase the cash value. Moreover, there is also the option to reinvest the dividends into the cash value, earning interest in return.

Endowment Plan 

Along with providing an insurance cover to the life of the insured, endowment plans also help the policyholder to save consistently over a fixed period of time such that they are entitled to get a lump sum amount upon the maturity of the chosen policy in case they survive the tenure of the policy. Furthermore, the death benefit is offered to the beneficiary in case of the policyholder’s unfortunate death.

Money Back Policy

A money back plan is best suited for those individuals who are looking for a guaranteed return on their investments. Unlike a regular life insurance policy, a money back policy pays a survival benefit over the course of the policy to the policyholder rather than paying the amount after the maturity of the policy. This policy pays out a percentage of the sum at regular intervals throughout the term of the policy. These policies are certainly the most expensive as they offer returns to the person insured throughout the duration of the plan.

Unit Linked Insurance Plans (ULIPs) 

One of the insurance policies offered by life insurance companies in UAE is ULIPs.  These come with a dual benefit of insurance as well as investment. On one hand, a death benefit is offered in the event of the insured’s untimely death. On the flip side, the policyholder can invest in several funds and generate capital growth. It’s a kind of life insurance policy in which the cash value of the policy might change on the basis of the present Net Asset Value of the related investment assets. The premium of the insurance paid to the provider is recycled for buying units in the investment assets that are chosen by the policyholders.

Pension Plan 

Popularly also known as a retirement plan, these pension plans are most suited to senior citizens as well as those individuals who want to plan a secure future. This policy makes sure that you have a financially secured retirement that offers you a structured income plan known as an annuity payment, depending on your preferred policy. The life insurance companies in UAE will help the policyholders in maintaining a stable and secure retirement. Upon its maturity, this sum will be invested to create an income flow, which is consistent and is called pension other than being called an annuity.

2. Life Insurance Premium Rates

Choosing a Life insurance policy can be confusing amidst the wide array of options available. Therefore, begin by looking for life insurance companies in UAE that offer the most economical plans. When looking for life insurance quotes in UAE, one must know the factors that impact the life insurance premium rates like the ones listed below:

Age and Health status

The overall premium that is payable for a life insurance policy in UAE is arrived at by the underwriting process. However, apart from this, various other factors for instance, the age of the applicant for the policy, their medical history, profession, the annual income of the individual alongside their lifestyle, and hereditary ailments play a significant role.

Essentially, there is no predefined algorithm used by life insurance companies in UAE to ascertain the premium of a life insurance plan, instead, the life insurance company evaluates the magnitude of risk accompanying the applicant’s life.

Expenses and Marginal Profits

The premium that is payable for life insurance plans varies from one provider to another, essentially because of the cost of expenses incurred during the underwriting of the term plan. The final due premium that the policyholder ends up paying is an amalgamation of the expenses along with the risk factors cost, the cost of operation, and the profit margins. Compare the different breakdown of insurance premium rates offered by different life insurance companies in UAE before choosing the one that is in your budget.

Contingency Charges

Out of all the factors that play a vital role in ascertaining the premium of life insurance plans, one of the not so significant factors is contingency charges. Despite the fact that contingency charges do not add enormously for the insured but impact the insurer massively. Therefore, contingency also ends up playing a significant part in calculating the overall cost of life insurance premiums.

3. Evaluate future of insurance policy

Seek help from your insurance agent or search the online portals of the several life insurance companies in UAE to understand the finer details of your policies. Often the Exclusions are overlooked by policy buyers. Exclusions are those events that are not covered by your insurance policy provider and are therefore important to not miss out before buying a policy. Know and understand them before buying the insurance policy instead of leaving you and your dependents shocked when the crisis strikes.

4. Check the history of claim settlement by the insurance company

Just like insurance companies go to great lengths to corroborate your insurability, examine the claims payment ratio of the company you buy insurance policies from. A simple online search will suffice, answering all your doubts and questions. However, don’t be swayed if you find a few cases where the company refused to pay the settlement because often times insurance companies refuse to pay if a claim is a fraudulent or due to some other legal or contractual reason. 

5. Opt for Automatic Payments

Make sure to find out whether your insurance policy has an auto-debit option that will allow the company to debit your premiums from your bank account automatically. This prevents you from the hassle of remembering to keep your payments regular without endangering the risk of lapsing your policy.

6. Conversion Option

When opting for a term life insurance, which is only functional for a specified term, it is always best to have the option to transform it to a whole life insurance from a term insurance plan as it approaches its expiration date. Some policies do not offer this option and it is better not to pick such policies.

A conversion option allows you to re-evaluate your current financial circumstances such as your budget, health, dependents, etc., once the term insurance is over, and choose whole life insurance if you feel that you need one.

List of best life insurance companies in UAE

Finding the best life insurance companies in UAE can be a tedious job; hence, we are listing the top insurance providers in the UAE to ease your selection process:

S.no.

LIFE INSURANCE COMPANIES IN UAE

POLICIES OFFERED

1.

Zurich Insurance Company

  • Your Life Plan
  • International Term Assurance Plan (ITA)
  • Futura Policy
  • International Decreasing Term Assurance (ITA)

2.

Union Insurance Company

  • Flexi Life
  • Sure Term
  • Group Life Insurance

3.

Alliance Insurance

  • Endowment Assurance Platinum Plan
  • Anticipated Endowment Platinum
  • Quantum Four Platinum
  • Suprema
  • Optima Gold

4.

Salama Insurance 

  • Whole Life Plans
  • Hyat Plus
  • Hyat Superior
  • Term Plans
  • Hemaya Plus

5.

LIC International

  • Renewable Term Assurance
  • Participating Whole Life Plan
  • Pure Term Assurance (PTA)
  • Double Cover Joint Life Plan

In a Nutshell

Choosing an insurance policy is not a minuscule task and therefore you must take your time to thoroughly research the premium, coverage, and other relevant features offered by the many life insurance companies in UAE. Pick a company that supports you and your dreams but more importantly, pick a company that supports your loved ones even when you no longer can.

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