Term Insurance for Family in UAE: Top Plans & Benefits

Best Term Insurance Plans in UAE

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With a guaranteed death benefit, term insurance can cover essential expenses like mortgage payments, children’s education, and daily living costs. This financial safety net offers peace of mind, knowing that your family will have the resources to maintain their lifestyle even in your absence.

All in all, getting a term policy is a practical step towards safeguarding your family’s well-being. Read on to find out more about a term life insurance plan for a family!

What is a Term Plan for a Family?

A family term insurance plan is a life insurance policy that offers financial support to the family if the insured individual passes away. This policy can be customised with add-on riders like critical illness or accidental death benefits.

The plan provides a death benefit to the nominee if the policyholder dies within the policy period, which can range from 5 to 30 years or even more. Policyholders can also extend the coverage period or switch to a whole life insurance plan for lifetime protection.

How Does a Term Plan for Family Work?

Family term insurance provides life coverage to the policyholder and their family members — such as a spouse or children — for a set period (typically 5 to 30 years or more). It pays a death benefit if the policyholder passes away during this time.

This is how it works —

Enrollment - The policyholder selects the coverage amount, term length, premiums, and beneficiaries.
Premium Payment - Regular premiums are paid, either monthly or annually, to keep the policy active.
Coverage Activation - Coverage begins once premiums are paid, insuring the policyholder and their family.
Death Benefit Payout - If the policyholder dies during the term, the death benefit is paid to the beneficiaries. This amount can be used to cover expenses like funeral costs, outstanding debts, daily expenses, and more.

Family term insurance does not have savings or cash value — it only provides benefits if the policyholder dies within the term.

What are the Features of Family Term Life Insurance?

Detailed below are the key features of this type of term policy —

Death Benefit - The amount beneficiaries receive upon the policyholder's death
Term Length - Coverage duration, usually between 5 to 30 years
Premiums - Payments for coverage — typically lower than other life policies but may increase over time
Renewability - Option to renew family term insurance plan coverage without a medical exam at the end of the term.
Conversion Option - Ability to switch to a permanent life insurance policy without a medical checkup
Accelerated Death Benefit - Access a portion of the death benefit if diagnosed with a terminal illness
Rider Options - Additional coverage like accidental death, waiver of premium, or critical illness for an extra cost

What are the Benefits of a Family Term Insurance Plan?

Mentioned below are the major advantages of family term insurance —

Affordable Coverage - Family term plans have affordable premiums even with high life coverage amounts. This makes them a great option for families on a budget.
Death Benefit - The primary objective of a term insurance plan for a family is to secure the life financially assured’s family if the former passes away during the plan tenure. The death benefit covers end-of-life expenses, works as an income replacement, or pays off debts.
Flexibility - Family term policies offer flexibility in selecting the premium methods and payout options.
Coverage for Specific Tenure - With a family term insurance plan, you get cover for a predetermined tenure. As a policyholder, you can select the tenure that suits your financial objectives and requirements.
Enables Estate Planning - Family term plans can be used to plan an estate or will and provide death benefits to the beneficiaries.
Helps Family Maintain Lifestyle - Families usually have specific lifestyles and expenses tied to their income. When an earning member of the family passes away, family term insurance benefits help the survivors maintain their standard of living. The sum assured is generally significant enough to support their needs.

What are the Types of the Best Term Insurance Plan for Families?

Here are the types of term insurance for families —

Level Term Plans - Fixed premium and sum assured throughout the policy term (5-30 years) The nominee receives the assured sum upon the insured's death. No survival benefits are provided.
Increasing Term Insurance - The sum assured increases annually by a set percentage or amount This is ideal for combating inflation. However, keep in mind that premiums may start higher to balance the increasing coverage.
Decreasing Term Insurance - The sum assured decreases annually, reaching zero at the policy's end Under this term plan, premiums remain low and fixed. It is suitable for those with reduced financial obligations like loan repayment.
Convertible Term Plans - This family term life insurance plan allows conversion to a regular life or endowment plan, providing coverage beyond the term policy. Higher premiums reflect the added flexibility and future benefits.

Who Should Buy a Family Term Insurance Plan?

Anyone can buy a family term life insurance plan based on their requirements. Here’s a list of individuals who can buy this plan —

Family Dependents - Term insurance is essential for anyone with dependents, such as a spouse, children, or elderly parents. This is because it provides financial support in case of the policyholder's absence.
Breadwinners - It ensures financial stability for families relying on the policyholder’s income.
Debt Holders - Term policies cover outstanding loans, like car or home loans, relieving the family from financial burdens.
Single Parents - These plans offer financial security for children solely dependent on one parent, ensuring their future is protected.

Why Should Sole Earners Apply for a Term Plan for Family?
A family term insurance plan provides crucial financial security against life's uncertainties, especially for sole earners. It ensures that family members receive a substantial payout if the policyholder passes away. The primary reasons are that it — Acts as income replacement to cover living expenses and maintain the family's current lifestyle Helps pay off existing debts and financial liabilities, preventing a burden on the family Provides funds for dependents' needs, such as children's education and healthcare Offers additional coverage for critical and terminal illnesses, with separate payouts for medical expenses

Why Should Sole Earners Apply for a Term Plan for Family?

A family term insurance plan provides crucial financial security against life's uncertainties, especially for sole earners. It ensures that family members receive a substantial payout if the policyholder passes away.

The primary reasons are that it —

Acts as income replacement to cover living expenses and maintain the family's current lifestyle
Helps pay off existing debts and financial liabilities, preventing a burden on the family
Provides funds for dependents' needs, such as children's education and healthcare
Offers additional coverage for critical and terminal illnesses, with separate payouts for medical expenses

How to Select the Best Term Insurance Plan for Families?

Here are some key points to consider when buying a term insurance plan for your family —

Coverage Amount - Choose a sum assured that meets your family’s financial needs, considering monthly expenses and annual income.
Claim Settlement Ratio - Go for an insurance company with a high claim settlement ratio, which indicates reliable claim payouts.
Riders or Add-ons - Look for additional benefits like critical illness or accidental death coverage to customise your policy.
Claim Settlement Process - Check customer reviews and policy ratings to ensure a smooth and hassle-free claims process, avoiding excessive paperwork and delays.

Where Should You Apply for Term Life Insurance in the UAE?

You can buy a term insurance plan in the UAE on Policybazaar.ae.

This is a one-stop portal that offers the best insurance plans from the leading insurance companies in the UAE. You can always look for individual term plans in just a few minutes.

Here’s what you get when you apply for term life insurance on Policybazaar UAE —

Compare and select the plan that meets your needs
Round-the-clock customer care service
Customisable insurance plans
Assistance from industry experts in case you get confused

Frequently Asked Questions

Yes, you can buy a term plan for family members if you are an earning member. If the life assured passes away during the policy tenure, the beneficiaries will get the lump sum of the sum assured.

Yes, term insurance plans are usually affordable as they offer only death benefits and no maturity benefits.

Yes, you can change the nominees at any point during the policy tenure.

Yes, you need to submit income proof when you buy an insurance plan.

Yes, you can cancel your plan whenever required.

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