Life Insurance

What is Life Insurance?

Life insurance is an agreement between a policyholder and an insurance provider, wherein the insurer (insurance company) assures to pay a certain amount of a death benefit to the beneficiary upon the untimely death of the policyholder during the tenure of a life insurance policy.

In return, the insured agrees to pay some specific amount of money as a premium on a regular basis, a limited premium, or a single premium. With suitable life insurance coverage in place, one can ensure the financial stability and security of their family’s future.

Life Insurance Policy in UAE

There are a few life insurance companies in UAE that offer a broad range of life insurance plans such as endowment policy, term plans, whole life insurance, ULIPs, etc. The premium rates for life insurance UAE vary from policy to policy and it is based on the applicant’s age, medical history, sum assured, income, and several other factors. However, applicants can easily get the best life insurance coverage at the right price if they indulge in proper market research and analysis by comparing best life insurance quotes. For a decent coverage of AED 1 million, the payable premium ranges from AED 1200-1400.

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. 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.

How Does Life Insurance Policy Work?

Life insurance Abu Dhabi and across the UAE works in the following steps:

Step 1: A policyholder pays the premium to the insurance provider.

Step 2: An insurance company 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 maturity benefits.

Best Life Insurance in UAE

Let’s compare life insurance policies from top life insurance companies at one place and find the best life insurance in Dubai as per your requirement.

Life Insurance Companies	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

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 life insurance policy that offers financial coverage to the insured for a specified “term” of years. If the life assured dies during the term period while the plan is active, a death benefit will be paid to the beneficiary.

2. Whole Life Insurance

Whole life insurance policy offers a life cover for the policyholder’s entire lifetime. Upon the untimely demise of the insured, the sum assured is paid to the beneficiary. In addition to offering a death benefit, this type of life insurance policy also has a saving component which accumulates a cash value that policyholders can withdraw or borrow as per their convenience.

3. Endowment Plans

Endowment plans are a type of life insurance policy that do not only offer the coverage in case of sudden demise of the policyholder but also provide a maturity benefits at the end of the policy.  

4. Unit Linked Insurance Plan (ULIP)

Unit Linked Insurance Plan or commonly known as ULIP is an amalgamation of insurance and investment. Since it is hybrid plan, the money invested is divided into two parts. One part of the premium goes towards protecting your life and the rest of the premium is invested in the market for securing future wealth.  

5. Money Back Policy

In this type of life insurance policy, the policyholder receives a percentage of the sum assured at regular intervals during the tenure of the plan. On survival of the term, an insured 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.

6. Pension Plan

Also known as a retirement plan, this life insurance policy ensures financially secured retirement, where a regular income is provided as an annuity payment, depending on the chosen type of policy. 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

The table below will highlight & compare main aspects related to the different types of life insurance policies in the UAE:

Parameter	Term Life Insurance Policies	Whole Life Insurance Policies	Endowment Plans	Money Back Policies
Overview	Pure risk protection plans.	Protection plus saving plans that offers lifelong coverage.	Insurance plus savings plan- may or may not be participatory	Protection plus savings plans, providing guaranteed money back throughout the policy tenure.
Term	Usually ranges from 5-40 years	Covers the whole life of an insured.	Usually ranges from 10-40 years	Usually ranges from 20-25 years
Death Benefits	Payable	Payable	Payable	Payable
Maturity Benefits	Not Payable	Payable	Payable	Payable
Premium Costs	Affordable Premiums	Usually have higher premiums	High premiums	Affordable Premiums

Benefits of Life Insurance Policy

There are many benefits of life insurance for consumers. Some of the primary benefits of life insurance policies are highlighted below:

1. Death Benefit: In case the policyholder dies during the policy tenure, which results in the loss of income for their family, the life insurance provider offers compensation in terms of a death benefit.

2. Guaranteed Income: Life insurance policies come with the guaranteed sum assured amount which is payable by the insurance provider to the beneficiaries on the demise of the policyholder.

3. Coverage for Health Expenses: Life insurance policies also offer critical illness cover 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.

4. Peace of Mind: Buying the best 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.

5. Helps in Wealth Creation: 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.

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

How to Find Cheap Life Insurance Quotes in the UAE?

Life insurance is indeed the best way to provide your family members with a financial safety net. So, it is imperative to opt for the best life insurance policy. However, apart from opting for the right life insurance policy, you also want to opt for an affordable plan. Follow the below-mentioned steps to find cheap life insurance Abu Dhabi and across the UAE:

1. Opt for a Life Insurance Policy Sooner Than Later: Buy life insurance at a young age to take the advantage of a low premium since the price of life insurance policy increases with the age.
2. Maintain a Healthy Lifestyle: Majority of the top life insurance companies require a medical test when a policy seeker enters the cover after some specific age or if the policyholder selects a high sum assured. The cost of the premium will be determined on the basis of the health condition of the policy seeker. That’s why, it is important to maintain a healthy lifestyle and quit smoking to opt for a life insurance UAE at low premium.
3. Shop Around: Compare different life insurance quotes online based on their features, premiums, and coverage to find the best life insurance policy at affordable premium.
4. Avoid Unnecessary Add-ons/riders:  Make sure you don’t include unnecessary riders in your life insurance policy as they might increase your premium costs uselessly.

Select Annual Premium Payment Option: Majority of the top life insurance companies in the UAE offer the flexibility of paying premiums on monthly, quarterly, and semi-annually basis. Nevertheless, some of the life insurance companies levy extra charges on all of these premium payment options. That is why, it is advisable to choose annual premium payment option to avoid paying additional charges.  

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 life 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. 

 

What is Group Life Insurance?

A group life insurance UAE is a type of life insurance policy in which an individual contract covers the whole group of people.  Usually, the policyholder is an entity or an employer, and this life insurance UAE policy covers the members of the group or employees. Group life insurance is offered as part of an entire employee benefit package.

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 UAE 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 the 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.

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 calculator Dubai and get the exact payable premium for a particular life insurance policy.

Life Insurance Premium Calculator

Life insurance calculator makes use of four different values to calculate the premium of the life insurance policy i.e. the coverage, age of the applicant, term of the plan, smoking status. 

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 Dubai 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 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 Cover

Life insurance plans that are coupled with critical illness Insurance provide extensive coverage against a wide array of illnesses. The critical illness cover 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.

Claim Settlement Ratio of Life Insurance Plans

When it comes to choosing the right life insurance Dubai 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 life insurance companies in Dubai and all over the UAE with a higher claim settlement ratio as it will increase their likelihood of receiving the sum against a claim. 

How to Claim Life Insurance?

Here is the step by step guide to life insurance Abu Dhabi and UAE 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 will 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, one can easily avoid such situations.

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 Abu Dhabi and all over UAE is to choose the type of policy. Insurance seekers should assess their insurance requirement and budget followed by researching online life insurance 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 Dubai plans to effectively meet the financial obligations of the loved ones. 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 Life Insurance Quotes

The applicant can research online on the official website of the life insurance 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 life insurance quotes based on criteria like pricing and features followed by shortlisting the provider and plans. Finally choose the best life insurance policy that fits your budget and suits all your insurance requirements.

Who can apply for Life Insurance in UAE?

Life insurance policy 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 life insurance companies 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
• Emiratis can opt for life insurance UAE plans provided the fact they have relevant documents.
• Also, life insurance for expats in UAE is offered, 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 UAE 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. 

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