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 policy. In return, the insured agrees to pay some specific amount of money as premium on a regular basis, limited premium or a single premium.

The UAE is home to one of the highest expatriate populations in the world. Being an expat living outside your native country it becomes even more important to get the right life insurance. With a suitable life insurance policy in place one can ensure the financial stability and security of their family’s future. There are a few life insurance companies in UAE that offer a broad range of life insurance policies plan such as endowment policy, term plans, whole life insurance, ULIPs, etc. The premium rates for life insurance vary from policy to policy and it is based on the applicant’s age, medical history, sum assured, income, and several other factors.

Life Insurance Policy in 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 Life Insurance policy, 36% 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.

Life Insurance Policy Premium

The premium of life insurance policies in the UAE is quite dynamic and depends upon numerous factors. However, applicants can easily get the right plan at the right price if they indulge in proper market research and analysis. For a decent coverage of AED 1 million, the payable premium ranges from AED 1200-1400.

Some of the major factors that affect the price of payable premium of life insurance plans in the UAE are age of the applicant, health status, medical conditions, income, and employment. As the thumb rule of insurance goes the younger the applicant the lesser will be the premium. Secondly, the health status of the applicant is another crucial factor that affects the premium of the plan. If the applicant is in a good health the premium will be lesser, on the other hand if the applicant is suffering from medical conditions then the payable premium will be higher. Similarly, the income and employment status also affect the payable premium of life insurance plans in the UAE.

Here is list of best life insurance policies from the leading life insurance companies or providers:

Provider	Life Insurance Policies
Zurich Insurance	Your Life Plan International Term Assurance Plan (ITA) Futura Policy International Decreasing Term Assurance (ITA)
LIC International	Renewable Term Assurance Participating Whole Life Plan Pure Term Assurance (PTA) Double Cover Joint Life Plan
MetLife Insurance	Future Protect Life Cover Decreasing Term Insurance Live Life Insurance Policy
AXA Insurance	Life Protect Plan Simple Life Plan
Noor Takaful	Pure Protection Life Care plan
Salama	Hyat Plus Whole of life Plan Hyat Superior whole life plan Hemaya Plus Term plan
Takaful Emarat	Fixed Term Decreasing Term Accidental
Union Insurance	Sure Term International Life Insurance Program
Alliance Insurance	Whole Life Term Insurance Plan
Oman Insurance	Life Protect Unit Linked Diabetic Care Life Easy Term Insurance Plan
FPI Insurance	Internation Protector Middle East Stand-alone life cover Stand-alone critical illness cover Earlier critical illness cover or life cover

Features & Benefits of Life Insurance Policy

Life insurance policy comes with a wide range of features and benefits. Some of the primary ones are highlighted below:

1. Safeguards the Family’s Interest: A suitable life insurance policy ensures that the family of an insured individual is taken care of financially, even when he or she is not around to look after them. Whether it’s the monetary support for providing higher education to the policyholder’s children, or replacement of income, or outstanding financial obligations, with the right life insurance policy you can secure the future of your family and loved ones.

2. Coverage for Health Expenses: Life insurance policies also cover critical illness treatment and hospitalization expenses. In case of any event that leads to disability or diagnosis of any illness life insurance plan allows one to seek proper treatment.

3. 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.

4. 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.

5. 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.

6. Promotes Savings and Investments: 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. There are numerous life insurance plans in the market that provide two-way benefit of coverage and investment. The premium paid by the policyholder is broken down and is used to provide coverage and investment benefits. The capital is invested in market-based securities that offer periodic returns that are repaid to the policyholder in the form of dividends.

7. Loan Facility: One can also opt for a loan against some of the life insurance plans. 

8. Protection against Liabilities: In order to reach your goals in life we often need to opt for loans, credit, mortgage, etc. The repayment of these loans requires a steady flow of income which might be disturbed due to any unforeseen event leading to demise or disability of the sole breadwinner of the family. In such a scenario, it becomes crucial to protect your family members from the burden of outstanding financial liabilities which is possible by purchasing the right life insurance plan.

9. Add-on Riders: Most of life insurance plans come with option of add-on riders that are auxiliary cover over the basic plans usually purchased with the objective of enhancing the protection quotient of the plan. Some of the most common add-on riders that are coupled with life-insurance plans are temporary/permanent disability cover, critical illness cover, terminal illness cover, waiver of premium benefit, personal accidental coverage, etc.

10. Maturity Benefits: As mentioned earlier some life insurance plans are developed to provide investment benefit along with financial security. In the case of these plans there is a maturity benefit associated with the insurance plan that provides monetary benefit at the end of policy period. 

Types of Life Insurance UAE 

There are many types of Life insurance policies available in the UAE and some of them are as follows:

1. Term Life Insurance

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. In case the insured person survives the term of the policy, the insurance cover will cease without any value and no death claim can be made. This type of life insurance is a replacement of income, which remains active only for a specific number of years. Term insurance can further be classified into decreasing, increasing, and lever term insurance plans.

2. 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. Simply put, these policies also involve a cash value benefit, which rises with time. The policyholders can withdraw this cash value or obtain a loan against it according to their convenience. Moreover, in the case of the unfortunate death of the insured individual before paying off the loan, there will be a reduction in the death benefit that will be paid to the nominees.

For building the cash value, the policyholders can remit payments above the scheduled amount of premium. Moreover, they can reinvest the dividends into the cash value, earning interest in return. For gaining access to the cash reserves, the policyholders can request a loan or the withdrawal of funds. There will be an interest amount charged on the loans, which may differ from one provider to another.

3. 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. It is defined as a type of life insurance UAE, which is paid to the insured person in case he or she still alive on the maturity date of the policy, or otherwise to the nominee. The nominees receive the sum assured along with the participating profit or bonus or guaranteed additions (if any). The profit or bonus is payable for the duration for which the insured person survives the policy.

4. 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. It is a type of life insurance in which the policy’s cash value may change according to the present NAV or net asset value of the concerned investment assets. The amount of life insurance premium paid to the provider is used for purchasing units in those investment assets that are selected by the policyholders.

5. 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 avails the full sum assured in case of death within the plan tenure no matter how many installments have been paid out. There policies can be classified as the most expensive ones offered by the insurance providers because they offer returns to the insured person during the tenure of the plan. The money back plan gives a person a path or planning the course of his or her life with an amount, which can be expected within regular intervals.

6. 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. The life insurance companies in Dubai will help the policyholders in maintaining your retirement corpus. Upon maturity, this amount will be invested to generate an income stream, which remains regular and is known as annuity or pension.

Comparison between Different Types of Life Insurance Policies UAE

Term Life	Whole Life	Endowment	Unit-Linked
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 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.
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
Affordable and Flexible	Higher price, less flexibility	Moderately-priced, less flexible	Moderately priced, financially flexible
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

How Does Life Insurance Policy 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.

How to Find Cheap Life Insurance Quotes in the UAE?

Life insurance could be a confusing thing to find as there are various types of life insurance policies and plan options to select from. When looking for a life insurance quotes in Dubai, one must know the factors that impact the life insurance rates, which are listed below.

1. Health of the person over-all

The life insurance companies run a thorough medical test on the applicants of the life insurance policy to determine their overall health. The results are taken into consideration while deciding the insurance premium to be charged from the policyholders against their life cover. The better their health, the lower would be the premium amount.

2. Health history of the family

It is common for the life insurance providers to ask for the health history of the family of the policyholders. There are some genetic medical conditions. Understanding the family’s health history will help an insurance provider get a better knowledge of the overall health condition and longevity of the applicants. However, the most essential factor in their insurance application is their own health.

3. Age and gender of the applicant

Age of the applicants is a very important factor while deciding the insurance rates. The younger the applicant, the lower would be the premium according to the medical condition. The reason is that with age, the medical health of a person declines, adding more risk to their life. A lot of insurers also take the gender of the applicant into consideration, as a lot of studies say that females usually live longer as opposed to males.

4. Whether he or she is a smoker or a non-smoker

Since smoking is not good for health, it adds up to the premium cost. When a person quits smoking, he or she will be thrilled to see the amount of money they can save on their insurance.

5. Lifestyle of the applicant

Lifestyle of the applicants is another major factor that is taken into consideration while deciding the life insurance price. In case the applicant is involved in a lot of adventures and high-risk activities, their insurance prices will be higher than otherwise.

6. Career and profession

Your professional life is another important aspect for your insurance provider to decide the insurance rates. They will check the stability of your career and the sector you work in for determining the risk involved and hence, decide the life insurance price. 

Usually, people start worrying about life insurance policies once they begin their family or purchase a house and suddenly come to the realization that they have grown-up. It is important to find an affordable life cover so that they do not divert too much amount from their other objectives such as college savings and retirement. The best way of getting cheap life insurance quotes is looking at the plans offered by different providers. To make things easier for the policy seekers, there are various online comparison tools or web aggregators where they can find the best life insurance quotations from different insurance companies and they can select the one which is the most suitable and economical for them.

What is Group Life Insurance?

A group life insurance is a plan that is intended to last only during the working years of the insured person. The group life insurance policy is not an individual agreement but is owned by the employer of the insured. An individual can be part of this group life insurance agreement of the employer and can be secured under the plan if he or she is eligible.

Although this plan is initially inexpensive, the costs rise as one gets older, that is, the life insurance premium will increase with the increase in age. The life cover gets terminated with the termination in the employment. Some of the group life insurance policies have the options of portability; however, they contain restrictions and exclusions and the premium amount increases. The portability comes to an on reaching a certain age.

Difference between Group Life Insurance and Individual Life Insurance

Group Life Insurance	Individual Life Insurance
It is owned by the employer of the insured person.	It is owned by an individual known as the policyholder.
This policy lasts during the working years of the insured only.	This policy continues up to retirement and till the maximum age of 100 years.
It offers a high benefit amount; however, only in the working years.	It offers a death benefit, which does not decrease because of age.
It can be obtained at economical rates for the short-term.	It offers unmatched rate stability.
One should have coverage to apply for child or spouse policy.	There is no need to have coverage to apply for a child, spouse, or grandchild policy.

Top 5 Best Life Insurance Companies in UAE

The top 5 best life insurance companies in UAE are as follows-

1. AXA Life Insurance

AXA is a famous French insurance company, which offers a huge range of insurance services and products throughout the globe. It has its headquarters in Paris and majorly operates in the Middle East, Europe, North America, Indian Pacific Region, and African subcontinent. AXA life insurance UAE is famous door offering customer-friendly and innovative insurance solutions to its customers.

2. Zurich Insurance

Zurich life insurance is famous for offering financial aid to the nominees of the policyholders who depend on them in case they are not around to help them anymore. It provides various types of life insurance plans to the customers, out of which they can select the one that suits their needs the best. The policy seekers can also avail Zurich critical illness insurance, which is an additional benefit that is available with the insurance plans.

3. LIC Insurance

Life insurance Corporation is an insurance company based in India, which has set up its subsidiary companies using the name LIC International in the Emirates. LIC life insurance offers a wide variety of plans that are suitable for the basic requirements of the policyholders and their families. One can enjoy the benefits such as the provisions for retirement, future planning, kids’ wedding and education with a LIC policy.

4. MetLife Insurance

MetLife life insurance offers a simple and flexible collection of solutions for assisting in securing the future of the families of the policyholders. It provides financial security to the family as well as peace of mind, which comes with it. These insurance policies offer life cover with the potential of investment for the future. It offers different types of life insurance policies to the customers to choose from along with a joint insurance coverage plan also.

5. FPI Insurance

FPI life insurance is an international insurance provider, which has years of experience in the insurance market. It offers various insurance products & services, which can be tailored to meet the requirements of the customers. FPI life plan offers protection to the policyholders and their families and businesses from unfortunate events like premature death or critical illness.

Factors that Affect Life Insurance premium

Life insurance policy provides 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-

1. Mortality, age and Health status

The overall payable premium of life insurance policy 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 policy 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.

2. Expenses and Marginal Profits

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.

3. Requisite Elements

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.

4. Life Insurance with Critical Illness Coverage

Life insurance plans that are coupled with critical illness Insurance provide extensive coverage against a wide array of illnesses. The critical illness rider increases the payable premium but there is a significant improvement in the protection quotient offered by the basic plan. In case any of the insured members or the policyholder is diagnosed with any sort of critical illness then the insurance provider will pay for the medical expenses incurred in the treatment.

How to calculate 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

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. 

Claim Settlement Ratio of Life Insurance Plans

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. 

Step by Step Guide to Buy Life Insurance in UAE 

Below are five easy steps by which one you can purchase life insurance plans –

1. Decide the type of policy

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.

2. Determine the coverage

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.

3. Analyze your Budget

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.

4. Get Quotes

The applicant can research online on the official website of the provider or a web aggregator or contact insurance providers offline on their official contact number to get different life insurance quotes..

5. Compare, Shortlist and Purchase

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.

Who can apply for Life Insurance in UAE?

Life insurance has become a necessity for everybody. All the residents in the UAE are eligible to apply for a life insurance policy if they meet the eligibility criteria as determined by the concerned insurance provider.

Eligibility Requirements for Buying A Life Insurance Policy

Here are some of the basic requirements of the providers in the UAE.

• The applicants must be aged between 18 years to 75 years to be eligible for entering into an insurance agreement.
• The applicants must have a regular and reliable source of income.
• The policy seekers must be a resident of the UAE and should have documents in support of their residence
• Both expats and UAE nationals can opt for life insurance plans provided the fact they have relevant documents

Please note that the minimum eligibility requirements may vary from one insurer to another.

Documents Required to 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)
• Bank Statement from the past three to six months
• Income certificate
• Salary Slip
• Proof of health status

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

How to Claim Life Insurance?

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.

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.

Common Reasons behind Life Insurance Claim Rejections and How to avoid them

There are several instances when life insurance claim submitted by the nominee of the policy or claimant are rejected. In order to avoid such stressful situations, one needs to understand the major reasons that lead to claim rejection-

• Disclosure of incorrect information in the application form
• Incorrect details about medical history 
• Filing claim after the prescribed time frame
• Following incorrect procedure of claim
• Lack of required documents 

These are some of the most common reasons that lead to rejection of claim. However, by simply providing the correct information to the provider followed by filing the claim in the correct time frame and submitting the required documents you can easily avoid such situations.