Buy a term plan and secure your family
Term insurance plans have no maturity benefit and therefore are defined as pure risk protection plans that are meant to safeguard the future of the family of the insured. Term insurance plans are designed in a way to provide the most crucial thing i.e. a cover for your priceless life. These plans ensure that your loved ones don’t struggle for basic necessities due to a lack of financial resources in your absence.
Buying term insurance plans might not appear as an investment since there is no return quotient associated with them. However, contrary to the popular belief you are indirectly investing to build a more secure future for your loved ones when you are not around to look after them.
Term insurance plans are one of the simplest and most flexible forms of insurance products available in the UAE market. The primary objective of buying a term insurance plan is to provide a blanket of financial coverage to your loved ones and family members. These plans work by providing a death benefit in the event of the untimely demise of the insured party due to any natural cause or accident.
Term insurance plans are insurance products that offer financial cover for a given period based on the choice of the applicant. The duration for which the insurance plan covers the applicant can be a minimum of 5 years to a maximum of 30 years based on the choice of the insurance seeker. In case the policyholder passes away within the policy period the nominee of the plan will be entitled to receive a death benefit.
In order to understand how term insurance plans work, let us consider an exemplary situation. Suppose, a 35-year-old Musa Bin Rehman Purchases term insurance plan for the next 30 years. The sum assured of the plan is equivalent to AED 5 million. After 7 years of purchasing the plan, Musa is diagnosed with colon cancer which leads to his demise. Since his demise occurred within the policy period the insurance provider will pay the nominees of the plan a death benefit equivalent to AED 5 million.
Insurance cannot be compared to conventional investment products and schemes since there is no monetary return associated with these plans. The primary idea behind purchasing term insurance plans in the UAE is to financially secure the future of your family members and loved ones. The trail of life is extremely uncertain and none of us are really aware of what might happen very next moment. With the right term insurance plan in place, you can ensure that your family is secured financially even when you are not around to take care of them. The insurance company provides the sum assured which can be utilized by the family based on their requirements.
Term insurance is one of the most affordable insurance products when compared to other types of insurance plans available in the market. An important point to be kept in consideration here is that these plans are quite easy on the pocket and contribute significantly to strengthen the portfolio of the insurance seeker. However, if you want returns over these term insurance plans you can opt for Return of premium term plans. These return of premium term plans are quite similar to conventional term insurance plans and pay a death benefit. The primary difference between both the types of term insurance plans is that in case of ‘return of premium plans’ the premium will be repaid to the policyholder if they manage to survive the policy period.
Term insurance plans are one of the most vital investments one can make as an individual. Furthermore, people who consider term insurance plans as an unnecessary expense should contemplate the fact that any product, plan or tool that provides firm financial security towards unforeseen events in life is not an expense but a vital necessity.
In a Nutshell
Term insurance plans are flexible and affordable insurance products that provide financial cushioning and offer peace of mind. Considering all the benefits that term insurance offer at nominal cost, undoubtedly they are sensible options of investment that are value for money