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Term Insurance

Term insurance is the most basic form of life insurance, which comes at an affordable rate of premium. This low-cost policy offers life coverage to the insured, where the family gets a financial shield in case of the untimely death of the insured. The policy benefits can be availed for specific years in exchange for a regular premium.

Apart from the death benefit, the policy also comes in handy in covering those unavoidable financial burdens on the family, in case of an accidental disability of sole earner of the family leading to loss of income.

What’s the Need for Term Insurance in UAE?

Planning for the future of one’s family is one of the most important decisions. Buying term insurance, the insured can secure the financial safety of their loved ones, especially in countries like Dubai or other Emirates where cost of living is higher. The importance of term Takaful in UAE has been realised of late. However, the main reasons for buying term plan include:

  • The policy comes at a lesser premium than other life insurance policies.
  • Death benefit can be availed by the family in case of the sudden demise of the insured.
  • The policy payouts can be customised as per the needs of the insured, whether it can be a lump sum or monthly payouts.
  • As the premiums are comparatively less, the savings can be utilised in planning for other life goals such as retirement, child education, property purchase etc.
  • The policy can be clubbed with different riders and get the basic insurance coverage increased. Rider covers such as Critical Illness Cover, Permanent Disability, Accidental Death etc. can be availed at an additional cost.

Term Insurance: List of Inclusions

The list of coverage usually includes:

  • Death Benefit: In case of the sudden death of the insured, the family members can avail death benefit under a term insurance plan.
  • Family Income Benefit: In case of a disability leading to loss of income, where the insured is the sole bread earner of the family, the policy pays a lump sum amount on a regular basis. The amount can be used for paying off the unavoidable day-to-day expenses.
  • Family Takaful: Some insurance providers offer family Takaful benefit with an in-built terminal illness cover.
  • Financial Protection: The monetary assistance availed from the policy can be utilized in paying off those unavoidable expenses such as:
    • Mortgage repayment
    • Household bills and other day-to-day expenses
    • EMIs
    • Current and future school fees

Key Features & Benefits of Term Insurance

The key features and benefits of term insurance UAE are:

  • Simplicity: These plans are simple to understand than the other market-linked or whole life insurance plans. This is the most basic form of life insurance that a layman could understand how it works.
  • Affordability: Best term plan comes at an affordable rate. These are the most cost-effective plans, where insurance coverage can be availed at a competitive rate of premium.
  • Flexibility:These plans are more flexible in nature. The policy cover is paid in exchange for a premium. When the insured stops paying the premiums, the risk cover ceases. As there is no saving element, there will be nothing payable to the insured.
  • No Maturity Value: Term policy doesn’t offer maturity or survival benefit, where only death coverage is offered to the family of the departed.

Types of Term Insurance Plans in UAE

There are various types of term insurance policies available in the UAE. Depending on the provider, these policies may come with different benefits and features.

  • Convertible Term Policy: This policy comes with a limited number of years, which allows the policyholder to convert the policy into a whole life insurance policy. The main benefit of this policy is that the insured doesn’t require to submit any medical test while converting the policy.
  • Increasing Term Policy: An increasing term insurance plan allows to increase the death benefit with time. However, the premium rate might or might not remain the same during the policy tenure.
  • Decreasing Term Policy:Just opposite to increasing term policy, in a decreasing term plan, the sum assured amount reduces each year up to a fixed percentage. The premiums are comparatively lower than a pure term plan and the payments remain constant throughout.
  • Level Term Insurance:Under this policy, same amount is paid for a claim, no matter the claim is made in the initial stage of the policy or end of the policy term. Moreover, the insurance payments stay the same and there will be one payout only.

Apart from the above,  executive insurance, limited payment insurance etc., also belong to the types of term plan. Again, it depends on the provider whether it offers all sort of term plans or just a few of them.

Term Insurance: List of Exclusions

While a term cover protects the insured against the risk of death, there are certain conditions where the policy remains null and void. These include:

  • Any claim arising out of suicide or attempt to suicide
  • Death due to self-inflicted injury
  • If the reason of death is diseases such as HIV/AIDS
  • Accidental death while driving under the influence of alcohol
  • Claim arising for death due to pregnancy-related complicacy or childbirth
  • Any involvement in illegal activities

*For the extensive list of exclusion, kindly consider the policy fine print

Eligibility Criteria for Buying Term Policy

The eligibility criteria for buying term insurance may vary from insurer to insurer, however, the minimum age limit is:

  • Entry age: 18 (depending on the insurer)
  • Maximum age: 65 to 75 years (depending on the insurer)

Documents Required to Buy a Term Insurance

The most common documents required for buying term policy are:

  • Emirates ID
  • Residential Visa
  • Recent Photographs

*The documents may vary or the insurance provider may ask for additional documents as per the discretion of the company

How to Calculate Term Insurance Premium?

Premium is the most important aspect while buying a term policy. Basis on the insurance coverage, the premium is calculated. However, by using the term insurance premium calculator, the insurance seekers in the UAE can easily calculate insurance premium. One can also approach insurance aggregator websites such as Policybazaar.ae to calculate the premium and compare term plan.  

Term Insurance Comparison

Not every plan fits with everyone. For instance, some plans come with basic term coverage, while some others may come with additional features such as term plan with a critical illness. Hence, to find out the best among the rest, online comparison of term insurance policies in UAE is essential. Online comparison helps in getting the right policy as per the insurance needs of an individual. Moreover, one can also find joint term insurance for husband and wife if looking for a joint insurance account.

Term Insurance Claim Process

In order to claim the term cover smoothly, one should follow the right claim steps, which include:

  • Claim Intimation: Whenever a claim arises, immediately inform the insurer and register the claim by calling on the customer care number. There might be a claim intimation window after the occurrence of an incidence, within which a claim has to be registered.
  • Claim Assessment: Once the claim is registered, the insurer will assess the claim request along with the documents submitted.
  • Claim Settlement: After end-to-end verification, the insurer settles the claim amount and payment is made to the beneficiary’s savings account.

Best Term Insurance Plans in UAE

Consider the below table for best term life insurance plans in UAE:

Plan Name Provider Sum Assured Entry Age Unique Benefits
Hemayati Plus Salama Insurance AED 500,000 18-59 years
  • Family Takaful
  • Worldwide coverage
  • Guarantee maturity benefit
  • Built-in terminal illness cover
 
Sure Term Union Insurance

AED250,000

AED500,000

AED750,000

AED1,000,000

18-55 years
  • 100% sum insured in case of accidental death
  • Death due to Illness:
    • 20% of sum insured in case of death due to illness within first 6 months
    • 12+ to 18 months: 60% of the Sum Insured
    • 18+ months: 100% of the Sum Insured
    • Worldwide coverage
Term Insurance Alliance Insurance   -
  • Higher sum assured
  • Convertible into any life insurance plan
  • Pay the premiums for a limited terms and get coverage for a maximum of 25 years
 
Pure Protection Plus Noor Takaful AED: 100,000 to AED 750,000 18-60 years
  • Most cost-effective premium for a higher sum assured
  • Terminal illness benefit up to AED 150,000
  • Child Takaful in case of the sudden demise of the insured
  • Global Coverage
  • Repatriation Benefit of AED 5,000

How much cover do I need?

Ans:

insurance coverage should be based on your and family’s needs. You should make sure whatever coverage you have opted for, it matches the needs of your family.

How do I choose which term cover should I go for?

Ans:

With multiple options available in the market, it can be difficult to select the right policy. Here comes insurance comparison into the picture. You can compare various plans at Policynbazaar.ae and get the most affordable plan as per your requirement.

What are the information required to buy term insurance in the UAE?

Ans:

In the UAE, there are several insurance providers who offer term cover. You can either buy online or visit the insurers’ offices to buy one. When it comes to buying term cover, you’ll require:

  • Emirates ID
  • Residential Visa
  • Required premium amount

Where should I purchase Term policy online?

Ans:

If you are buying term cover online, either you should buy from the insurer’s website or you can buy through aggregator websites such as policybazaar.ae.

When does the cover begin?

Ans:

The cover begins from day 1.

Till when is the policy valid?

Ans:

The policy is valid through the plan tenure.

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