A Life insurance is a protection plan that offers insurance coverage against the untimely death of the insured or after some specific period of time when the insurance policy matures.
To avail this protection, the insurer pays a pre-determined amount of money as premium towards maintaining the policy. Moreover, the primary purpose of a life insurance policy is to safeguard the financial interest of the policyholder’s family.
There are a few life insurance companies in UAE that offer a broad range of life insurance policies plan such as endowment plans, term plans, whole life insurance, ULIPs, etc. The premium rates for life insurance varies from plan to plan and it is based on the applicant’s age, medical history, sum assured, income, and several other factors.
Life insurance is an agreement between an insured and an insurer, wherein the insurer assures to pay a certain amount of a death benefit to the beneficiary upon the untimely death of the insured during the tenure of life insurance plans. In return, the insured agrees to pay some specific amount of money as premium on a regular basis, limited premium or a single premium.
Life & death are a part of life but the demise of your loved one can leave a void which can never be filled. However, an apt life insurance policy aids in filling certain aspects of this void, ensuring the financial security of the insured’s family.
Life cover in the UAE has yet to become popular among the people. As per a survey, it has been found that nearly 51% of the UAE residents do not have an LI policy, 36% percent people said that it is too expensive while the rest of the people are not familiar with this term. Given these numbers, it is quite easy to understand that the majority of the UAE’s population is unprotected.
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Provider |
Life Insurance Policies |
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Oman Insurance |
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Alliance Insurance |
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Noor Takaful |
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Salama |
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Takaful Emarat |
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Union Insurance |
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Life insurance plan comes with a wide range of features and benefits. Some of the primary ones are highlighted below:
Safeguards the Family’s Interest: An apt life insurance plan ensures that the family of an insured individual is financially taken care of even after his or her demise.
Coverage for Health Expenses: Life insurance policies also cover critical illness treatment and hospitalization expenses.
Variety of LI Plans: Life insurance companies in UAE offer a variety of insurance plans to the insured individual depending on his/her insurance need.
Guaranteed Income: LI policies come with the guaranteed sum assured amount which is payable by the insurance provider to the beneficiaries on the demise of an insured individual.
Peace of Mind: Buying the right life insurance policy gives an individual peace of mind, knowing that the welfare of their loved ones is taken care of in case of any unforeseen event.
Promotes Savings: Some of the life insurance policies provide returns that are linked to the market while other policies offer bonuses on maturity, helping one to save money for their future.
Loan Facility: One can also opt for a loan against some of the life insurance plans.
There are plenty of LI plans available in the UAE and some of them are as follows:
A term insurance is the most basic and affordable type of insurance policy that offers coverage for a specified “term” of years. If the life assured dies during the term period which is specified in the policy while the plan is active, a death benefit will be paid to the beneficiary.
The whole life insurance policy offers a life cover for the policyholder’s entire lifetime. Not only it caters a survival benefit to the insured but also it enables partial withdrawals of the sum assured.
This is a saving cum insurance plan where the insured gets a lump sum amount if he/she survives until the maturity date. Additionally, the death benefit is offered to nominee in case of unfortunate death.
ULIPs come with a dual benefit of insurance and investment, where the death benefit is offered in an event of untimely death of the policyholder. On the other hand, insured can invest in certain funds and create capital growth.
This policy gives pays out at regular intervals of a percentage of the sum assured during the tenure of the plan. On survival of the term, an insured individual avails the balance sum assured. However, the nominee avails the full sum assured in case of death over the plan tenure.
Also known as a retirement plan, this policy ensures financially secured retirement, where a regular income is provided as an annuity payment, depending on the chosen type of policy.
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Term Life |
Whole Life |
Endowment |
Unit-Linked |
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Valid for a pre-decided tenor, provides coverage in case of disability or demise of the insured... |
Valid for entire lifetime of the policyholder, provides coverage in case of disability or demise of the insured. |
Lump sum provided after completing the maturity period, the plan comes along with an additional insurance coverage in case of unfortunate demise of the policyholder. |
Integration of insurance and investment plan, death benefit is paid in case of the demise or disability of the policyholder.
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Applicants can choose add-on riders to enhance the protection |
Applicants can choose only the coverage of the policy |
Applicants can choose the maturity benefit and the coverage of the plan. |
Applicants can choose investment vehicles as per their choice and convenience |
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Affordable and Flexible |
Higher price, less flexibility |
Moderately-priced, less flexible |
Moderately priced, financially flexible |
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Provides financial Protection over a fixed period of time |
Provides financial protection over the entire life |
Acts as long-term investment that provides returns on maturity |
Provides benefit of two types of plans into one |
Life insurance works in the following steps:
Step 1: An insured individual pays an insurer a monthly premium for coverage.
Step 2: An insurance provider guarantees to pay a sum assured to the beneficiary in case of the untimely demise of the policyholder during the policy period. Thus, it ensures the financial stability of the policyholder’s family members.
Step 3: On survival of the life insured until maturity, a maturity benefit will be payable to the policyholder itself. However, it depends on the type of policy and whether or not it offers the maturity benefits.
The top 5 best life insurance companies in UAE are as follows-
Life insurance plans provide financial protection and safeguard the loved ones of the policyholder in case of untimely demise which might lead to monetary instability. In return to the service policyholder/insured has to pay a fee known as the premium of the plan. There are various factors that kept into consideration while calculating the life insurance premium. Here’s a quick rundown-
The overall payable premium of life insurance plan UAE is determined by the underwriting process. Apart from this a plethora of factors such as the age of the applicant, medical history, occupation, annual income, lifestyle and hereditary ailments play a crucial role.
Primarily, there is no pre-defined formula used by insurers to calculate the premium of a life insurance plan UAE, instead the insurance provider assesses the degree of risk associated with the life of the applicant. By convention, people elder in age end up paying higher premiums since they are more likely to fall ill or die in comparison to young individuals.
The payable premium of life insurance plans varies from provider to provider, mainly because of the expenses incurred in the underwriting of the policy. The final payable premium that the insured ends up paying is a combination of expense along with risk factors cost, operational cost and profit margin.
Out of all the detrimental factors that play a vital role in determining the premium of life insurance plans, one of the minor factors is contingency charges. Although contingency charges do not add significantly for the insured but affect the insurer extensively. Therefore, contingency also adds to the cost of life insurance premium.
Life insurance premium can be calculated by using an online, easy to use tool known as life insurance premium calculator. Insurance seekers and willing applicants can fill in their details into the life insurance premium calculator and get the exact payable premium for a particular life insurance policy.
Life insurance premium calculator makes use of four different values to calculate the premium of the plan i.e. the coverage, age of the applicant, term of the plan, smoking status.
When it comes to choosing the right life insurance plan and provider claim settlement ratio is a crucial factor. Claim settlement ratio often known as CSR is defined as the ratio of total number of claims paid against the total number of claims filed by the insurance provider.
Claim Settlement ratio can be mathematically represented as-
CSR= total number of claims settled/ total number of claims registered
The claim settlement ratio provides an insight into the cumulative number of claims settled by a particular insurance provider. Insurance seekers should try and look for companies with a higher claim settlement ratio as it will increase their likelihood of receiving the sum against a claim.
Below are five easy steps by which you can purchase life insurance plans –
The first and most important thing to do when buying life insurance is to choose the type of policy. Insurance seekers should assess their requirement and budget followed by researching online to decide the type of policy.
The next step in the process is to determine the cover of the life insurance plans to effectively meet the financial obligations of their loved. Typically, one should get a coverage equivalent to ten times the current annual income for a safe and secure future.
Life insurance is a lifelong commitment and therefore it is vital to check and analyze the budget before purchasing life insurance plans in the UAE.
You can research online or contact insurance providers offline to get different quotes.
The final step is to compare different plans based on criteria like pricing and features followed by shortlisting the provider and plans. Finally choose the best life insurance plan that fits your budget and suits all your requirements.
An applicant needs to submit the following documents in order to buy a life insurance policy:
Note: However, policy buyers may also need to submit some additional documents as requested by the insurance company.
Here is the step by step guide to life insurance claim settlement:
Step 1: Inform the Insurer about the Claim
In order to begin the claim settlement process, the beneficiary should inform the insurer as soon as possible. The required details for the intimation of claim are policyholder’s name, insurance policy number, insured’s date of birth, place of death & cause of death, beneficiary’s name, etc.
Then, he/she need to submit some required documents to the insurance provider that serve as proofs. This will include:
The death certificate of the insured along with the claim form provided by the insured. Original documents of the life insurance
Any other documents according to case-related or as per the requirement of the insurer.
The final step in the claim settlement process involves verifying and processing. This insurer will verify the documents and the policy form. Once the verifying process is complete, the claim is processed further.
| Life Insurance Providers | Plan Types | Unique Key Benefits |
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| Union Insurance |
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| Salama Insurance |
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| Alliance Insurance |
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| Noor Takaful |
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What are endowment policies?
Endowment plans are saving cum insurance plan where the insured gets a lump sum amount if he/she survives until the maturity date. Additionally, the death benefit is offered to the nominee in case of unfortunate death.
Is Term insurance more expensive or whole life plans?
Term insurance plans are more affordable in comparison to whole life insurance plans.
What is life insurance?
Life insurance is an agreement between the policyholder and insurance provider. The insured individual agrees to pay a premium on a regular basis and the insurer guarantees to pays out a sum assured to the nominee in the event of the demise of the insured individual.
What is the meaning of sum assured?
Sum assured is the assured amount that the policyholder will receive. It is also known as the coverage amount for which an individual is insured.
What are the various types of life insurance plans are available in the UAE?
Sum assured is the assured amount that the policyholder will receive. It is also known as the coverage amount for which an individual is insured.
Is it expensive to buy life insurance UAE?
There is a wide range of life insurance options that work for every budget and financial situation. Thus, it is best to shop around and compare coverage options and price as per your insurance need and convenience.
Will I get anything on maturity under term life insurance?
You will not get anything since there is no maturity under term insurance. The only benefit you will get under this plan is the death benefit. The beneficiaries will get the sum assured in case of the untimely death of the policyholder.
Can I change the duration of the LI after the policy is issued to me?
Well, the duration of LI can’t be changed after the policy is issued to you.
What is the best life insurance in UAE?
There are various life insurance providers in the UAE. However, the best insurance plan is the one that meets your insurance need and affordability.
Can I borrow a loan against life insurance Dubai, UAE?
Yes, you can borrow a loan in times of cash crunch against some of the life insurance plans in the UAE.
How do I decide on the amount of life insurance I need?
The amount of money that you get upon the maturity depends on the premium you pay during the tenure of your insurance policy.Well, the maturity benefit you need majorly depends on your income, living standard, spending habits, etc. You should at least aim to avail a maturity amount that is equal to 8-10 times your annual income.
What If I don’t make my premium payment on the right time?
Majority of the insurance providers usually provide a grace period, a maximum of 30 days to allow you to make premium payment once it falls overdue. But if you still don’t pay your premium after that grace period, your insurance stands inoperative and you can’t simply avail any benefits from your life insurance policy. However, you can revive your insurance policy once you clear all your overdue premium payments & then you’ll again start availing the benefits of your policy.
