Smartest investment and life plans in UAE

Life Insurance Wise Investment Choice in the UAE

By PolicyBazaar
  | Published: 16 January 2020 | Last Updated On: 19 January 2021

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Smartest investment and life plans in UAE

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Life insurance is an integral component of a diverse investment portfolio. Insurance, in general, is a broad term and includes a variety of financial tools meant for safeguarding and providing financial security to the investor and their loved ones in case of any unfortunate event. Apart from providing financial security, some insurance products offer periodic returns in the form of dividends, and later a death benefit upon the demise of the insured.

Ever wondered, if you can use your life insurance as an investment tool? If you are looking for the best insurance plan for your family or a wise investment option to consider you’re at the right place. In today’s thread, we will be discussing how life insurance can be a wise investment tool.

Financial advisors consider life insurance as a form of financial investment in UAE mainly because of the cash value component associated with it. Buying traditional life insurance allows an investor to borrow against cash value from financial institutions which enhances the utility of permanent life insurance plans.

Insurance plans are divided into two major categories i.e. term insurance plans and life insurance plans. Term insurance plans are less expensive and leave money for other investments. Contrary to this, permanent life insurances are a bit expensive as these plans are guaranteed payouts for the policyholder. Permanent life insurance allows the insured to accumulate cash value over time while term insurance plans do not which is another reason permanent insurance is expensive than term insurance.

Very often financial experts say that investment in UAE and insurance are two different subjects and both of the categories have their importance and utility. Financial advisors suggest buying term insurance to mitigate risks at a low premium and the remaining money can be invested in different investment tools in UAE.

People invest in life insurance plans with the motive to provide financial security for their families. In a real-time scenario, permanent life insurance plans are not just limited to financial security, but these plans also act as an effective investment tool to accomplish your long term goals. Permanent life insurance plans can help the insured to build a significant corpus for their twilight years and to create wealth to meet other needs during different stages of life.

Whether you are single with a family counting on you for their needs, a married individual as the sole breadwinner, a middle-aged professional looking forward to retiring peacefully with financial security- Life insurance has got something for everybody.

Advantages of Life Insurance

Provides security

Permanent life insurance is the only investment tool that provides guaranteed funds right from the day the plan is issued. In case of any unfortunate event where the policyholder passes away, the nominees are entitled to receive a death benefit that will safeguard the financial needs of the insured’s family.

Opt for a loan

Policyholders in the UAE can opt for a bank loan against the life insurance plan. Permanent life insurances are investments in UAE that are meant to provide coverage for a lifetime which also allows the insured to opt for a loan over the withdrawal amount of the insurance plan. The surrender value of the insurance policy increases over time and one can opt for a bank loan against the surrender value as well.

Accomplishing your long and short-term goals in life

Life insurance plans help the insured to achieve their long and short-term goals in life at an accelerated pace. Life insurance allows the investor to plan strategically for goals like retirement, child’s education, and marriage, building your home, etc.

Investment in UAE in the form of money back plans provides small fragments of the sum assured periodically which helps to accomplish your short term goals and handling emergencies.

Mental peace

All the benefits mentioned above when kept together offer peace of mind. With a life insurance plan in place, your loved ones are financially secured in case of any eventuality also with proper investment planning you can meet all your financial goals at different stages in life which provides peace of mind.

The Bottom-Line

For the majority of people with basic financial needs and no complex financial asset to protect, permanent life insurance plans are good investment options. However, while investing in life insurance the primary focus of the investor should be the diversification of financial portfolio instead of making money.

A diversified financial portfolio helps to mitigate market and other risk and ensure strong financial cushioning in phases of financial instability. Investment in UAE in the form of insurance plans is vital for every individual to spend a peaceful and stress-free life.