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What Makes Life Insurance and Critical Illness Cover So Important?

By PolicyBazaar

Buy a term plan and secure your family

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Published: 03 April 2020Last Updated On: 08 February 2021

AED 100,000 cover starting at just AED 7/month

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Would you agree to the fact that your life is your most prized possession?

And would you agree to another fact that there is nothing more unpredictable than this prized possession of yours?

If you truly agree, then you would have done something to secure it? Haven’t you?

In case you haven’t, it is high time you understand the importance of appropriate life insurance & critical illness coverage.

Guess what? The irony here is that most of the people usually consider this kind of insurance cover as a rider or an add-on. They fail to understand that it is a vital part of their investment in Dubai.

Now the question is,

Why do people in Dubai do not have their life insurance in place?

The most common answers we have come across are-

“I have never really given a thought about it.”

“I can’t really afford it.”

“Oh! I don’t need it. What could possibly happen to me?”

Let’s now put Mind over Matter and see the real picture here.

As we discussed in the beginning, life is pretty uncertain. And, insurance has the potential of being so much more when it comes to financial planning. A life cover and critical illness cover policy will help in easing the financial burden of the dependents if something unfortunate happens to the policyholder.

As per a report given out by one of the popular insurance providers, the average age for a claimant of life insurance was only 50 years, while the average age for a claimant of critical illness cover was only 48 years.

Another startling truth is that, as per a survey, every third death in the UAE is a result of cardiovascular disease.

Do you know, you can use your life & critical illness insurance cover may not just be an important part of your financial planning, but it may also enhance your financial plan.

These three ways will support the statement mentioned above.

  • Achieving Long-Term Objectives
  • Savings on tax
  • Financial Safety against debts and loans

Let’s elaborate on them.

1)     Achieving Long-Term Objectives

A lot of you must have long-term financial objectives like owning your house, purchasing a car, education and eventually the marriage of your children, and the most important, the planning for your retirement.

Life & critical illness cover helps in moderating the risk of missed financial objectives. Since this may help in keeping your investment in place for what it was intended and helps in working towards a safe as well as planned financial future.

2)     Savings on Tax

If you are an expat, but have assets outside of UAE (like property), having a life insurance plan may act as a financial tool for saving tax for the purpose of inheritance tax. You must also keep in mind that being an expat living in the UAE, your assets within the Emirates or outside will also be considered for inheritance tax.

Therefore, it becomes even more important to invest in life and critical insurance covers if you do not wish to sell your assets back in your home country for covering such potential liability.

3)     Financial Safety Against Debts and Loans

Getting an insurance cover may also bring in the advantage of managing risk against the outstanding debts (if any). The insurance plan having coverage amount similar to the outstanding debts will reduce the risk of default in the repayment of the debt, in case something happens to the policyholder.

Hence, critical illness and life insurance cover help to protect the financial security of your loved ones. It helps to bridge the financial gaps arising from the unfortunate events like critical illness or death. 

The Final Verdict!

Now,

If cost is a concern, you must know that such insurance cover won’t take you away from your fortune. If you invest an amount equal to the hard-earned dirhams you spend on coffee on this insurance cover, your and your family’s future will be pretty secured financially.

Keep in mind, it is very important to look for appropriate life insurance coverage. You can easily find one online by comparing different available policies in the market. Settle for the one that sufficiently covers you and your dependents while suiting your pocket too.