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What is Life Insurance? Benefits of Life Insurance in UAE?

By PolicyBazaar

Buy a term plan and secure your family

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Published: 26 August 2020Last Updated On: 08 February 2021

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Without any doubt, today’s generation is much more aware of financial planning when compared to previous generations. That being said, most of the individuals now focus on investment & creating a corpus, but unfortunately some people fail to consider one of the key components of financial planning that is none other than life insurance. 

Yes, you read that right.

Life insurance is amongst the most important financial component that only helps you in building a corpus but also offers financial protection to your loved ones when you are not around. In fact, financial experts agree that insuring your life and offering financial protection to your loved ones in your absence is important before you focus on other aspects of financial security. 

So, if you have a family who depends on you financially?

Or

Are you a sole breadwinner in your family?

Or

Do you want to secure the future of your loved ones financially after you are gone? 

If the answer is yes to any of these questions, then you must opt for a life insurance cover policy without giving a second thought. But before you opt for it, know what is it all about and what are the benefits of life insurance.

What is Life Insurance?

Life insurance policy is an agreement between the insurer and insured where the policyholder pays the insurance premiums over a period of time. In turn, the insurer offers the dependents i.e. parents, spouse, or children a lump sum amount if the policyholder dies during the tenure of the policy. In this manner, it helps the insured’s loved ones to meet their various financial requirements even in his/her absence. In addition to this, there are some life insurance policies offered in the UAE that provide investment benefits upon the maturity of an insurance policy.

Benefits of life Insurance

Though there are many benefits of life insurance, here we have mentioned some of the major ones:

Life Cover

This is one of the best benefits of life insurance policies. In an event of unforeseen event happens and the insured passes away, the insurance provider offers a lump sum amount to the family of the policyholder.

Helps to Create a Corpus

A life insurance policy is not only a plain financial instrument that offers a replacement for the loss of income but also it is a great investment component that provides good returns on the premium amount paid during the policy tenure. Some of the life insurance policies such as Endowment Plans, Unit-Linked Insurance Plans (ULIPs), Child Plans, and Pension/Retirement Plans help you in building a corpus in addition to offering a life cover. Therefore, it helps in fulfilling your dual requirements of safeguarding your family members against sudden loss of income and achieving investment goals.

Comprehensive Coverage at Affordable Premium

For just a small premium amount, life insurance providers offer high sum assured. For example, a term life insurance policy provides comprehensive coverage which is also more than ten times the premium amount paid, for a small amount of premium. There is no other financial instrument like life insurance available in the market which is why it has been considered as the most feasible option for individuals who are looking to build corpus and protect their loved ones financially even after their death.

Peace of Mind

Opting for an apt life insurance plan offers complete peace of mind. This is because you will be assured that your loved ones will have much-needed financial support even after you are gone. Thus, they will not have to bear the financial burden in your absence.

Coverage against Financial Liabilities

In order to meet your goals and fulfill your dreams, you might need additional financial support in terms of mortgages, loans, and some other types of debts. Whether it is a credit card debt or a home loan, dealing with such kind of financial liabilities can cause financial stress without a steady source of income. While you might have savings to clear some part of your outstanding debts now, your loved ones might find it tough to tackle all such liabilities in case of your untimely demise because of the loss of income. Therefore, opting for the right life insurance policy ensures that your loved ones have financial support to repay your loan and other outstanding debts even after you are gone.

Different Life Insurance Plans for Different Needs

Life insurance companies in the UAE provide different types of life insurance plans that include term insurance plan, Unit-Linked Insurance Plan, Whole Life Insurance Policy, Endowment Plan, Child Plan, Retirement Plan, and Money-Back Plan. You can choose any of these life insurance policies as per your insurance need. Please note that more features and benefits come with more premiums.

The Bottom Line

Well, no one wishes anything unfortunate happen to them but uncertainties do not come with prior notice. That is why we should always well-prepared for unfortunate events by opting for the right life insurance plan. It is a financial cushion that helps you and your family members in various ways while coping with many life events.