Life Insurance – What Is It and Who Can Have It?

Life insurance is a contract between a policyholder and the insurer. Under this contract, the insurance provider promises to pay a sum of money that is pre-decided to the family of the policyholder if he/she dies because of any uncertainty.Risk and ambiguity are always sporting chances in life. These risks are increasing day by day due to a variety of reasons, one of them being our fast paced lifestyle. Anyone can suffer due to the most surprising mishaps like destruction of properties, flood, etc. Wherever there is uncertainty, there is a risk. Here, life insurance helps you minimise all your risks.

To be precise, it is a tool used to minimise your losses and keep your financial plans on track Life insurance simply means being financially prepared for the rainy days in the future. It ensures that you and your family receive financial security in case the income falls short due to the demise of the breadwinner 

Type of Life insurances in UAE:

There are mainly five kinds of life insurance plans available to choose from. These are as follows:

  • Term Plan
  • Unit Linked Insurance Plan (ULIPs)
  • Endowment Plan
  • Retirement plans
  • Whole life insurance

1.) Term Life Plan 

Term life insurance policies are planned in such a way that they offer life cover at low premium rates and usually with a high coverage. These plans are bought for a pre-decided term period and they offer sum assured in case of the death of the policyholder.

2.) Unit Linked Insurance Plan (ULIPs)

ULIPs bring both security and savings united with elasticity to the policyholder. As these plans are linked with the money markets, they can bring more returns in comparison to the other plans. Good market performance will definitely give you higher returns.

3.) Endowment Plan

The endowment plan has a death benefit and also a maturity benefit. In case of death of the insured person during the tenure, a pre-decided death benefit is provided to the family. Moreover, if the insured person doesn’t face any mishaps, a maturity benefit will be paid to him/her. Thus, the endowment insurance plan covers both death and maturity and helps you in saving more.

4.) Retirement plan

Retirement planning is simply preparing oneself for post retirement life, financially as well as in all other aspects of life. This refers to the time when your paid working period ends. The non-financial features include lifestyle choices like spending time with family and travelling during retirement. Integrated retirement planning considers all the areas with equal significance.

The level of importance of retirement planning varies throughout different stages of life. When you are young, planning for retirement only means saving enough money for that time when you would not be able to earn. During the intermediate stage of your career, it may shift to setting certain income targets and taking the much-needed steps to realise them. Once you reach your retirement stage, your decades of savings will pay for you.

5.) Whole Life insurance

Whole life insurance is like a term life insurance plan with no fixed policy term. The plan is there for a lifetime. During this period, if the policyholder dies, the sum assured is paid as the death benefit.

Who needs Life insurance? 

Primarily, anyone who is a breadwinner or contributes to the expenses of a family should get a life insurance policy. Singles must also consider getting one if they have an ongoing loan to pay off. In case of the demise of the policyholder, such expenses are taken care of.

Let us take a look at the group of people who should consider taking a life insurance policy:

1.) Retired People – If you are retired and have a spouse or family members dependent on you, then you should unquestionably secure your future by buying Term insurance.

2.) Parents – Life is unpredictable, and you never know what the next moment has in store for you. Therefore, parents should always get themselves insured so that their dependent kids don’t have to suffer in case you leave them forever. 

3.) Business Person – In the UAE, banks have made it compulsory to have a Term or Life insurance for a person who wants to apply for a personal loan. This is done so that the bank can claim the money from the insurance provider in case the insured person dies without paying back the loan amount. Thus, it becomes important for them to buy Term insurance.

4.) Married couple – A married couple should always get Term insurance as a long-term gift for their spouse for securing their future.

What is the right time to buy a life insurance policy?

There is no specified age to buy a life insurance policy. One can buy life insurance at any stage of life, though some companies restrict selling life insurance to people above 70 years of age. It is always advisable to buy one in your early twenties since that’s when the premiums offered are the lowest. 

Benefits of getting life insurance in UAE:

1) Financial security

In case of an untoward happening that results in the loss of income for a policyholder’s family, the insurance provider gives compensation to the family as the death benefit. The nominee is entitled to receive the sum assured along with the bonus accumulated over a period of time.

2) Investment options 

Life insurance providers in UAE offer Unit-Linked Investment Plans (ULIPs), which are mainly investment tools based on the money market. These market-linked life insurance policies allow admirable gains during maturity; therefore, making ULIPs an investment tool.

4) Long-term savings 

If one wants to make a long-term investment, then life insurance is one of the best options available in the market. Such an insurance plan helps you make regular savings. Some life insurance policies also offer monthly payments, which is an ideal way to achieve retirement goals.

Best life insurance companies and their policies in UAE:-

Insurance Company Policies 
LIC International Renewable Term life AssuranceParticipating Whole Life PlanPure Term AssuranceDouble Cover Joint Life Plan
Oman insuranceLife ProtectionUnit LinkedDiabetic CareTerm Insurance Plan
Union insuranceSure Term International Life insurance Program
Zurich insuranceLife PlanInternational Term Assurance Plan (ITA)Future Policy
MetLife insuranceUture Protect Life CoverDecreasing Term InsuranceLive Life insurance Policy
AXA Insurance Sure Term International Life insurance Program

Eligibility Criteria to buy a Life insurance policy in UAE

  • Minimum age required – 18 years
  • Maximum age – 69 years (may vary from company to company)
  • Insured should be the resident of the United Arab Emirates

The Bottom Line 

In today’s fast-moving world, unpredictable world, buying life insurance has become a financial need to safeguard your family’s future.

Getting a life insurance policy might seem like an overwhelming task but by making use of digitalized era and comparing life insurance plans online, you can filter your options according to your requirement and get the best policy at lowest premium rates.

One of the ideal methods to buy a life insurance policy in UAE is through where you can easily research policy providers and their plans according to your requirements and lifestyle.

Brett Sartorial

Brett is a business journalist with a focus on corporate strategy and leadership. With over 15 years of experience covering the corporate world, Brett has a reputation for being a knowledgeable, analytical and insightful journalist. He has a deep understanding of the business strategies and leadership principles that drive the world's most successful companies, and is able to explain them in a clear and compelling way. Throughout his career, Brett has interviewed some of the most influential business leaders and has covered major business events such as the World Economic Forum and the Davos. He is also a regular contributor to leading business publications and has won several awards for his work.