Life Insurance

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 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.

What is Life Insurance?

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 Insurance in the UAE

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.

Features & Benefits of Life Insurance

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 demise of an insured individual.
  • Peace of Mind: Buying the right life insurance policy gives an individual a 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 which 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.

Types of Life Insurance Plans Available in the UAE

There are plenty of LI plans available in the UAE and some of them are as follows:

  • Term Life Insurance: 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.
  • Whole Life Insurance: 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.
  • Endowment Plan: 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.
  • Unit Linked Insurance Plans (ULIPs): 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.
  • Money Back Policy: 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 avail the full sum assured in case of death over the plan tenure.
  • Pension Plan: 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.

How Does Life Insurance Work in the UAE?

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.

Documents Required for Buying A Life Insurance Policy:

An applicant needs to submit the following documents in order to buy a life insurance policy:

  • Passport-sized photographs
  • Emirates ID
  • Passport with UAE residence Visa (for expats)
  • Address Proof (For example: utility bills)

Note: However, policy buyers may also need to submit some additional documents as requested by insurance company.

How to Claim Life Insurance?

The claim settlement process can be done in the following manner:

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.

Step 2: Submit All the Required Documents To Process The Claim

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.

Step 3: Claim Settlement

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.

Best Life Insurance Providers in the UAE

Life Insurance Providers Plan Types Unique Key Benefits
Union Insurance
  • Group Life Insurance
  • Flexi Life
  • Sure Term
  • Accidental death benefit
  • Coverage for disability
  • Coverage against illness
  • Hospital cash benefit
  • Repartition expense
Salama Insurance
  • Whole of Life Plans
  • Term plans
  • Savings Plans
  • Investment Plans
  • Premium Currency: UAE Dirhams (AED) & US Dollars
  • Flexible Premiums: Monthly, quarterly, half-yearly, & yearly premium paying options. 
  • Maximum Maturity Age: 100 Years
  • Entry Age Criteria: 18 years – 74 years
  • Grace Period: 90 days
  • Free Look Period: 30 days
  • Additional benefits:
    • Critical illness
    • Accidental death benefit
    • Permanent & total disability
    • Waiver of contribution
    • Benefit of family income
    • Accidental partial or total permanent disability
Alliance Insurance
  • Anticipated Endowment Platinum
  • Endowment Assurance Platinum Plan
  • Child Protection Plan
  • Quantum Four Platinum
  • Higher Education Assistance Plan
  • Money Builder Plan
  • Optima Gold
  • Suprema
  • Whole Life Limited Payment Assurance Plan
  • Solidarity –New Joint Life Plan
  • Term Insurance Plan
  • Secura-Personal Accident Insurance
  • Total Cover- Personal Accident Insurance
  • Group Life
  • Premium Currency: UAE Dirhams (AED) & US Dollars
  • Policy Term: 5-30 years
  • Entry Age Criteria: 18 - 65 years
  • Maximum Maturity Age: 90 Years
  • Grace Period: 30 days
  • Policy Payment Term: Single Pay, 3 Years Pay, 5 Years Pay, Full Term Pay.
  • Premium Payment Mode:  Monthly, quarterly, half-yearly, & Annually. 
  • Additional benefits:
    • Critical Illness 40
    • Permanent or partial total disability
    • Accidental death & Dismemberment
    • Family Income benefit
    • Waiver of premium benefit
    • Triple Accident Benefit
 
Noor Takaful
  • Life Care
  • Secure Income
  • Secure Invest
  • Smart Save
  • Pure Protection
  • Executive Care
  • Edu Care
  • Hajj Takaful
  • Policy Term: 5-30 years
  • Entry Age Criteria: 18 - 64 years
  • Maximum Maturity Age: 75 Years
  • Optional Coverage:
    • Accidental death
    • Additional level Term
    • Permanent partial disability
    • Temporary total disability
    • Critical illness
    • Terminal illness
    • Medical expenses
    • In-hospital cash allowance
    • Repatriation
    • Funeral Expenses

What is life insurance?

Ans:

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?

Ans:

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?

Ans:

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?

Ans:

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?

Ans:

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?

Ans:

Well, the duration of LI can’t be changed after the policy is issued to you.

What is the best life insurance in UAE?

Ans:

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?

Ans:

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?

Ans:

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?

Ans:

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.

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