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Term Insurance in UAE
Term insurance is a life insurance plan that offers higher financial coverage at lower premium rates for a fixed number of years. With a term insurance plan, the insurer provides the policy beneficiary with the sum assured in the event of the policyholder’s demise during the term.
Term insurance in the UAE is also considered a safe investment instrument as it offers substantial coverage with plenty of maturity benefits. The best part about term insurance plans is that the entire premium goes into securing your future. Based on your financial preferences, you can pay your term insurance premiums in different frequencies, such as yearly, quarterly, or monthly.
What is Term Insurance?
Term Insurance, also known as Term Life Insurance, is a type of life insurance that covers your life risks up to a defined tenure at the pre-specified premium amount. As the name suggests, it is a type of insurance that provides financial security for a particular ‘term’ that may vary from 65-75 years as per your term insurance plan. In case of your untimely demise, the insurance company will pay out the sum insured to your family. If you outlive the relevant tenure or cross the specified age, you will no longer retain the financial security.
Term Life Insurance Policy in the UAE and Dubai
Term life insurance in the UAE is the cheapest and the most effective method of safeguarding the financial interests of your family in case of your untimely death. Let us say that you are the only bread earner in your family, and you pass away without leaving a considerable fortune behind you. Under such circumstances, your family members will be forced to fend for themselves. To ensure that finances are the least of your family’s concerns after a mishap, term insurance in the UAE provides high life risk covers at a lower premium granting you peace of mind and your family a financial backup to remain financially independent. You can purchase a term life insurance policy in the UAE of up to AED 100,000 at a premium rate of AED 7 per month.
Types of Term Insurance Plans
There are several types of term life insurance plans available in the UAE. The two most popular variants are as follows:
1. Level Term Insurance Plan:
In this policy, the premium remains the same throughout the policy and comes with a premium guarantee from the insurance company. Level term plans can further be divided into the following categories:
Regular Pay: In this variant, premiums are paid throughout the policy term.
Limited Pay: In this variant, premiums are paid for a limited number of years, whilst the policy is valid for a longer duration. For example You can opt for a 30-year policy with a premium payment term of 10 years. This essentially means that you will have to pay your premiums for only 10 years, while your policy will remain active for 30 years.
Single Pay: In this variant, the insurance company collects the total premium that it would have collected over the entire course of the policy right at the start of the policy.
Return of Premium: In this variant, the policyholder gets back a percentage of the total premiums paid at the end of the policy period.
2. Annual Renewable Term Insurance Plan:
In this policy, the premium changes every year or after a fixed number of years. This plan is often cheaper than a level term insurance plan in the initial years, however over a longer duration can turn out to be more expensive.
Features & Benefits of Term Insurance in UAE
The key features of term insurance are as follows:
Simplicity - Term insurance plans are easy to understand as compared to other market-linked or whole life insurance plans. When the policyholder dies, the beneficiary gets a payout, no questions asked.
Affordability - Term policy is the most affordable form of life insurance. In the UAE, one can buy a plan for as low as AED 7 per month.
Portability - Term insurance plans available on Policybazaar.ae come with worldwide coverage. This means the policyholder is covered in any part of the world; so even if the policyholder migrates from the UAE post purchasing the plan, as long as he/she continues to pay the premiums, the plan remains active. This also means that the beneficiary of the policy can receive a payout in any part of the world.
What is the Right Time to Buy Term Life Insurance?
One of the biggest features of term life insurance policy is that they are a lot more affordable when you buy them young. The reason is pretty simple, a younger person with a healthier body is of a less risk for the insurance company to take. So, if your sole motive behind buying a term insurance plan is to ensure that your dependents are well taken care of, buying it young is a good choice. Ideally, the right time to buy term life insurance is as soon as you resume the responsibility of a family that depends on you for their basic needs.
Pros & Cons of Term Insurance Plan
Just like every other type of insurance plan, term life insurance also has own set of pros and cons. Although depending on the needs and requirements, the cons often act in favour of the policy holder. Given below is a comparison chart of the pros and cons of term life insurance policy in the UAE:
Pros
Cons
Lower premium rates hence, a more affordable choice
Temporary coverage with a pre-decided expiration date
A better and bigger pay-out upon the death of the insured for the beneficiaries
Re-qualification is required at the end of each term
Can be converted into a whole life insurance plan whenever you like
Does not accumulate a cash value i.e., no maturity benefit
Comes with a flexible term for the policyholder to choose
Premiums do not stay the same and can shoot up every time buy a new plan
Best Insurance Companies Offering the Term Insurance in UAE & Dubai
Here’s a quick rundown of some of the best term insurance plans in the UAE based on customer reviews, features, and services.
Alliance is one of UAE’s oldest and leading insurance. The company offers comprehensive insurance solutions to wide a range of customers right from corporations, individuals to government bodies and undertakings.
AXA Term Insurance
Life Protect: Level term insurance plan
Simple Life: Annual renewable term insurance plan
AXA, one of the largest global insurers, is a worldwide leader in insurance and asset. In the gulf region, AXA has been present for 70 years, offering a wide range of insurance products and services for corporate, SME and individual customers.
Their products offer instant issuance thereby making them customer-friendly and easy to procure. One can be done with the buying process in less than 3 minutes without the hassle of paperwork and physical signatures.
Life Insurance Corporation, commonly known as LIC is India’s largest life insurance provider. Operating under the name of LIC International in the gulf, it is a popular name amongst the NRIs residing in the region.
Metropolitan Life Insurance Company, better known as MetLife, is among the largest global providers of insurance, annuities, and employee benefit programs.
Live Life is one of the few products in the region that offers an extensive bouquet of riders and additional benefits. This is an ideal product for customers looking for comprehensive coverage.
National Life and General Insurance
Term Plan: Level term insurance plan
National Life and General Insurance were established in 1995. It is one of the leading health insurance providers in the UAE market. National Life and General Insurance has been recognized as a leader in the corporate medical insurance industry in the UAE, Oman and Kuwait markets.
Pure Protection Plus: Level term life insurance policy
Noor Takaful has emerged as one of the strongest Takaful brands in the UAE. The company was established in the year 2009 to provide a broad range of Islamic insurance products. The company has rapidly gained a sizeable market share.
Pure Protection is one of the few plans that offer a high policy term. Customers looking for maximum coverage duration should consider this product. To top it off, the plan has uniform rates for smokers and non-smokers. Pure Protection Plus on the other hand is one of the most elegantly designed returns of premium plans in the region. An ideal buy for customers looking for this feature in a level term insurance plan.
Oman Insurance is a comprehensive insurance company headquartered in Dubai, UAE that engages in insurance solutions for individuals and businesses in UAE, Oman and Turkey. Established in 1975 with majority ownership by Mashreq Bank, Oman Insurance is one of the largest publicly listed insurers in the country. Oman Insurance offers products across all lines of insurance.
While Digi Term policy is an online-friendly product that offers instant issuance, Life Guard on the other hand is a fully comprehensive level term insurance plan.
Salama is one of the most well-known names when it comes to Shariah-compliant Takaful providers in the UAE. The company was incorporated in the year 1979 with a paid-up capital of AED 1.2 billion. The company offers various types of insurance products.
While Hemayati Plus is a fixed tenure level term insurance plan, Hemaya Plus offers more flexibility in terms of sum assured and plan term options.
Takaful Emarat was established in 2008. It is a leading Shariah-compliant Life and Health Takaful Provider in the UAE. Takaful Emarat markets a wide range of individual and corporate life and health Takaful products including protection, savings and investment plans through a variety of distribution channels. Takaful Emarat is also a participating insurer providing basic mandatory health insurance in the Emirate of Dubai.
Fixed Term has grown to become a household name with its aggressive pricing and superior customer service. Customers looking to start their term insurance journey must give this option serious consideration.
Union is one of the most reliable and popular insurance companies in the UAE. The company was established in the year 1998 with a paid-up capital of approximately AED 330 million. The company is known for its budget-friendly and innovative lineup of insurance solutions for people from all classes of society.
Smart Term stands out amongst all term insurance plans available in the UAE. This term insurance plan is fully pre-underwritten, requires no medical checkups and comes with a pre-approved pre-existing disease cover.
International Term Assurance: Level term insurance plan
Your Life: Level term insurance plan
Zurich is a leading multi-line insurer that serves its customers in several markets around the globe. It provides a wide range of property, casualty and life insurance products in more than 215 countries and territories. Zurich has had a presence in the UAE for over 30 years.
International Term Assurance is UAE’s most popular term insurance plan. A household name, this plan offers loads of benefits, comprehensive coverage and comes at an attractive price.
Best Term Insurance Plans in UAE
Term Insurance Plan
Life Cover
Accident Cover (From Day One)
Sickness Cover (From Day One)
Price
AXA - Life Protect
AED 250,000
AED 250,000
AED 250,000
Takaful Emarat - Fixed term
AED 250,000
AED 250,000
AED 250,000
Noor Takaful - Pure Protection
AED 250,000
AED 250,000
AED 250,000
National Life
AED 350,000
AED 350,000
AED 350,000
Noor TakafulPure Protection Cashback
AED 200,000
AED 200,000
AED 200,000
List of Best Term Insurance Companies in the UAE in 2021
Following is a list of the best term insurance companies in Dubai and the rest of the UAE and a brief on the types of insurance covers that they offer:
Term Insurance Companies
Offered Term Insurance Plans
AXA
Level term insurance plan
Annual renewable term insurance plan
Alliance
Level term insurance plan
LIC International
Level term insurance plan
MetLife
Level term insurance plan
National Life and General Insurance
Level term insurance plan
Noor Takaful
Pure Protection: Level term life insurance policy
Pure Protection Plus: Level term life insurance policy
Oman
Digi Term: Level term life insurance plan
Life Guard: Level term life insurance plan
Salama
Hemayati Plus: Level term insurance plan
Hemaya Plus: Level term insurance plan
Takaful Emarat
Level term insurance plan
Union
Level term insurance plan
Zurich Term Insurance
International Term Assurance: Level term insurance plan
Your Life: Level term insurance plan
Why do You have to Need Term Insurance in UAE?
Term insurance forms an essential part of financial planning. It ensures the financial security of a family by providing them with a lump sum payment to meet household expenses, children’s school fees, etc. in case the breadwinner is no more.
Key features of term insurance are as follows:
One can buy the best term insurance plans only for as low as AED 7 per month, which is a fraction of what traditional life insurance plans cost.
The death benefit can be availed by the beneficiary in case of the sudden demise of the policyholder.
As the premiums are very less, the savings can then in turn be utilized for savings and investments.
The policy can be clubbed with different riders such as terminal illness, critical illness, disability and waiver of premium.
Who Should Buy Term Insurance in UAE?
Term life insurance plans are useful for anyone who has other people to take care of. If you have parents who are retired or not working anymore for any other reasons, you should consider buying one of the best term plans available in the UAE. Someone who has just gotten married and has a non-working wife, should also consider buying a term plan. If your parents are working as of now and so is your wife, you can delay the decision for a while but revisit this choice before family planning and other important financial decisions.
Why Should Expats Buy Term Insurance in UAE?
When living in a foreign land, ex-pats need to ensure that their families don’t face any financial hardships in their absence. Most ex-pats make the common mistake of only buying the best term insurance plan in their home country currency; for example, most Non-Resident Indians (NRIs) make the mistake of purchasing only a rupee-denominated term insurance plan. This leaves their UAE expenses and liabilities exposed.
What ex-pats need to consider is securing their UAE expenses while residing in the UAE. Let us consider a case wherein an ex-pat breadwinner meets with an untimely death and his/her family contemplates repatriation to the home country.
The family won’t be able to repatriate overnight.
The family will begin winding up their UAE lifestyle, which will take time.
Bank accounts of the breadwinner may get frozen till all pending dues are settled.
Paperwork will need to be filed with the bank to access funds.
All this might take a couple of months, which means that the family would need access to quick cash to meet regular expenses and other costs.
Getting a payout from the home country insurer would mean burdening the family with more paperwork.
Hence, the right approach is to buy a UAE term insurance policy that complements the home country term insurance plan.
Inclusions & Exclusions for Term Insurance
Term Insurance: Inclusions
The term insurance policy covers all forms of death, be it accident or sickness. Hence, in insurance parlance, these plans are often referred to as death-any-cause plans.
Term Insurance: Exclusions
While term insurance policy covers every scenario under the sun, the only exclusion that applies is suicide within the first 12 months of the policy term.
Eligibility Criteria for Buying Term Insurance policy in UAE
Any individual aged between 18-69 years can purchase a term insurance policy. However, it needs to be kept in mind that the premium depends on the age at entry and the premium increases with the entry age. An individual wishing to be covered till the age of 60 years can make significant savings by entering the plan at the age of 30 years as opposed to 40 years. Hence, the earlier a person buys a term insurance plan, the lesser is the premium.
Documents Required to Buy a Term Insurance policy in UAE
Term insurance plans today can be bought using just the following documents:
Emirates ID
Passport
Visa
How to Buy Term Life Insurance Plans in UAE?
Applying for and buying a term insurance plan is an extremely easy task. You can buy term insurance plans via both offline and online methods. Contact one of the branches of your insurance provider or get in touch with a broker to buy the plan offline. Either of the two can guide you through the buying process once you have stated your requirements.
To buy term insurance online, you can use the provider website or you can simply proceed to buy the plan from here on with PolicyBazaar UAE. Click on the application portal, and register to get term life insurance quotes. Choose the best term insurance plan as per your needs and provider you like and follow through with the next steps to finalize the purchase. To buy a term life insurance policy from the provider website, you can log in to the purchasing portal and complete a simple application process.
How to Calculate Term Insurance Premium?
Term insurance premiums are calculated based on age, gender, smoker status, policy term and sum assured. Insurance aggregator websites such as Policybazaar.ae help customers compare premiums online.
How Does A Term Insurance Plan Work?
As explained above, term insurance secures you for a pre-specified period. This period can range between 5 to 30 years, depending on the providers and your needs. Let’s say that you choose a term life insurance policy for 25 years. Such a plan will ensure that your dependents are paid the sum assured in case of your untimely death during these 25 years – the term of the plan. However when the policy matures, the coverage ends. Meaning, the compensation sum is only provided if the insured dies within the insured term of the plan.
How to Compare Term Insurance Plans in The UAE
One size does not fit all, and this phenomenon applies to even the best term insurance plans as well. For instance, some plans offer basic coverage, while others come with a variety of riders; some are level in nature while others are annually renewable. Online comparison helps individuals select the right plan for themselves.
Term Insurance Claim Process
In order to ensure a smooth claims process, beneficiaries are required to follow the below-mentioned steps:
Claim Form: Beneficiaries are required to submit a duly filled claim form along with relevant supporting documents.
Supporting Documents: Beneficiaries are required to attach a death certificate and other medical documents along with the claim form. In case the death occurs outside the UAE, beneficiaries are required to get the death certificate attested by the local UAE embassy.
Claim Processing: After receiving all the necessary documents, insurance companies process the claim within a few working days. Certain insurance companies process claims within just 3-4 working days.
Policybazaar Promise: Beneficiaries can even seek the help of the sales agent, for example, a provider such as Poicybazaar.ae provides beneficiaries with the necessary support at the time of claims processing. NRI customers can even avail the help of Policybazaar.ae’s dedicated NRI helpline.
Why Should You Buy Term Life Insurance Policy from Policy Bazaar UAE?
Being your one-stop solution for everything finance-related, PolicyBazaar UAE limits the hard work and helps you decide on the best term life insurance plan for you. You can compare term life insurance providers, plans offered, term life insurance quotes, and additional benefits – all in one place. It is not only time-saving but also convenient. On top of that, our financial experts and a prompt customer service team are always there to lend you a hand. With PolicyBazaar UAE, you buy smart and better.
FAQ's on Term Insurance
What are the benefits of term insurance?
Term Insurance policy offers you numerous benefits such as:
Life Cover for a longer tenure at lower premiums: At lower premiums, term insurance can offer cover against death, critical illness, and death in accident till the age of 65. Besides, term insurance guarantees assured payments in case of the demise of the policyholder irrespective of the reason.
Additional coverage: Also, you can purchase add-ons on your term insurance by paying extra money. This provides your family a more comprehensive and wider financial security for the future.
Ease of purchase: Besides, you can purchase term insurance conveniently online without any hassle.
What are the important features of Term Life Insurance Plans?
Features
Advantages
Death Benefits
Irrespective of the cause of death, the family of the policyholder will receive the insured sum in case of the death of the policyholder during the pre-specified tenure.
Free Look Period
In case you change your mind and do not want term insurance after purchasing it, you can return and receive a refund on your term insurance premium.
Grace Period
If you are late in paying the premium of your term insurance you can take advantage of the grace period which provides you with extra time to pay your premium
Term insurance riders
Accidental death
Disability or dismemberment
Critical Illness
Terminal Illness
Waiver of premium rider
Why Should You Buy a Term Insurance Plan?
Term Insurance plan in the UAE is one of the cheapest methods to safeguard your family’s financial interest making them financially independent even after your untimely demise.
How Much Term Insurance Coverage Do You Need?
No one can tell you the right amount of coverage for your family is better than you. Weigh the needs of your family members. Consider the future needs of your family such as your children’s education, marriage, etc., and decide the coverage you require.
How to choose the right term insurance plan?
To choose the right term insurance plan in the UAE:
Evaluate your needs and decide the sum.
Compare the premium offered by different term insurance providers.
Check what is covered under the plan
Check the background of the term insurance provider before purchasing a policy from them. You can find the most suitable term insurance to meet your needs at policybazaar.ae
How Long Should Be the Term of Your Term Plan?
An Ideal term insurance should neither be too short nor too long. Find a term insurance policy in the UAE which covers you till the age of 65 or 70.
What are the factors that can affect Term Insurance Premiums?
Some factors that can affect the term insurance premiums are:
Age of the buyer - The younger you are, the cheaper your insurance is. As you grow older, your term insurance becomes more expensive.
Medical History of the buyer - If you have a medical history of illness or your family has a history of a genetic disease, the premium on your term insurance plan will be higher.
Lifestyle Habits of the buyer - In case you are a smoker or a regular drinker, you are prone to higher health risks. Owing to these risks, the insurance provider may charge you a higher premium for a term insurance plan in the UAE.
Tenure and sum insured - The tenure and sum will be the determining factor for the term insurance policy in the UAE.
