Term Insurance Plan in the UAE: Which One Is Right For You?

Term Insurance Plan in the UAE: Which One Is Right For You?PolicybazaarAverage Rating / 5 ( reviews)
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Not all household expenses will be affected if the breadwinner’s income is cut by 1 percent. If the income of the breadwinner reduces by 20 percent, then the family has to control their few luxurious expenses. Now imagine what will happen if this income reduces by 100 percent? In such cases, the family will not be even able to cope with basic financial liabilities. Well, this is what a family will have to bear if the sole breadwinner of any family dies. To help you deal with such financial issues, there are plenty of life insurance companies in the UAE that offer term life insurance plans. Thankfully, you are required to spend only 1 percent of your income in order to ensure that the remaining 99 percent is available to your family in your absence.

An apt term insurance plan can offer you the high sum assured that will be enough to replace your income if you are no longer in this world.

However, when it comes to buying a term plan, most of the people are often confused about the amount of life cover that they should opt for, which plan to purchase and from which insurance company? To help you make the well-informed decision, here we have mentioned a few important tips:

Tip #1: Consider Your Life Stage and Number of Dependents in Your Family When Determining Sum Assured

The number of dependents in your family may vary at different life stages. Therefore, the financial responsibilities of a person do not always remain as that of a married person or a person with kids. So, the amount of life cover should be selected accordingly. Do not forget to consider the future & plan for increasing financial liabilities. This will certainly help you opt for an apt life cover amount which will ultimately help your family members in your absence.

Tip #2: Life Cover Amount Should Be Assessed Based on the Family’s Requirements and Not Just Your Income

No matter you are a sole breadwinner of your family or just a contributing member who gives some portion of his/her income to a family, opt for a life cover amount that is equal to the amount of income needed to sustain everyday’s expenses for your family.

Tip #3: Consider Any Other Liabilities You May Already Have

With the modern lifestyle, most of us opt for a home loan, car loan, mortgage or any other type of finances to meet the basic lifestyle needs of our family. So, add such liabilities to the cover amount in order to prevent the burden of EMI repayment from falling on your family’s shoulder after you are gone.

Tip #4:  Higher Claim Settlement Ratio Is Preferable

To ensure the financial protection to your family in your absence, Life Insurance Company should have a good claim settlement ratio. Basically, the claim settlement ratio is the numerical value that represents the number of settled claims against those claims who have been filed. The higher the claim settlement ratio, the better will be the chances of receiving the sum assured amount. 

Tip #5: Choose an Apt Rider to Boost Your Term Plan Coverage

Apart from offering a death benefit, some of the term insurance plans offer optional coverage in the form of riders that can be availed by paying extra premiums. Riders such as critical illness, income benefit, waiver of premium, permanent and partial disability cover, accidental death benefit, etc are some of the main riders offered in the UAE. These riders basically enhance the value of your basic term insurance plan.

The Final Verdict

Well, there are plenty of life insurance companies in the UAE that offer term plan. So, choose the plan by keeping the aforementioned tips in your mind to ensure the financial stability and security of your loved ones in your absence. This will certainly help you opt for the right term insurance plan as per your need and budget.

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