The 5 Best UAE Life insurance Options
Life insurance is very important whilst living in Dubai. Firstly it has a higher death and accident rate on the roads than almost every country in the West, secondly if you get caught up in the Dubai party lifestyle and end up doing all of the things that your new vacuas friends do, then its likely that your lifespan will be reduced rather than increased.
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The good thing is that health cover and hospital facilities is probably as good if not better in the UAE than it is in the West. There are good hospitals and doctors available to treat you, although of course there are also some pretty horrific back room chop chops that you would not want to visit if you are ill. Due to this you want to make sure any UAE life insurance policy and health insurance policy you have makes sure you end up in a good hospital and not an back street chop shop. You also want to make sure that your life insurance is with a reputable provider, read on to understand what I mean by this.
Finding your UAE Life Insurance Policy
You need to decide on the UAE life insurance policy that you will commit yourself to. Life insurance is something that many in the UAE consider to be optional rather than mandatory. You can choose to have an insurance cover for your life and your family or not to. If not the Dubai Government is not going to help you out with a cash payment when you snuff it – so my advice is to make sure you have insurance in place before you leave.
Different UAE life insurance policies have with different features and specific terms which are created to appeal to different types of customer. Before you make a choice of the insurance policy that will cover you please make sure you read through the features of the insurance policy to know if it will satisfy your needs.
Choosing a company
My honest advice is to completely avoid any UAE life insurance policy based out of the UAE with a UAE insurer or any local Middle Eastern Insurer unless you are a resident of the country that the insurance company is based out of. I have heard some horror stories of people taking out UAE based life insurance when they have been from the UK or the USA, they snuff it suddenly for whatever reason and then the life insurance company simply refuses to pay because they have decided that it was probably a preexisting condition before you took out the insurance. If you are an Emirates national this is not a problem because you have legal recourse, however if you are from the UK and take out Emirates company based life insurance you can bet getting a settlement will be harder. You will have little if any legal recourse and the company will be better connected than you and will often pay to ensure that any legal decision comes out in their favor. This is called “WASTA” it basically means who knows people the best, who can get shit done etc.
My honest advice is take out an insurance policy for your life in your home country of residence before you leave, make sure the company you deal with is covered by the legal framework in your country. You do not want your family fighting a legal battle after your death. If you are from the US or Europe take out a policy at home that covers you for your time in the UAE, do not take out a local policy.
Whole of life insurance
This is the most expensive insurance policy because the premiums are higher due to a savings element that is built into the policy. If you want to accumulate savings throughout your life insurance policy term then this is the best insurance policy for you. You can use this insurance policy as a vehicle in which you can easily save your cash. The policy pays out a specific amount of cash on the death of the policy holder or in-case of illness, depending on the contract if you are still walking the earth by the time you are 60 or 65 the policy will pay out a lump sum at certain dates in the contract.
The premiums are paid in periodic bases some yearly, monthly or quarterly it will depend on the terms of the contract. It’s for life so you will need to ensure you always pay your policy. The whole life insurance policy may also cover your children and spouse depending on the company that you have chosen. Although this can be a good way to save in the current environment you may not get a great return on your investment. Depending on your profile you may want to give this policy a miss and just cover yourself if you snuff it or fall terminally ill and leave the savings to a different vehicle that is more likely to deliver a greater return.
These are the most common insurance policies which are in high demand. They are designed to take care of long term insurance needs. It is your choice that you make on how many years that you want to be covered by the insurance policy. The premiums also are paid on the duration that you want to be covered.
Decreasing term life insurance policy
As the name suggests the face amount of the policy decreases as the years go by. The premiums to be paid remains constantly until the due date. This type of insurance policy can be used to erase a mortgage debt once the owner dies. This type of life insurance policy is normally required by the mortgage company before they give you the money.
Yearly renewable term policy
In this type of policy, premium increases every year once you choose to be in it. You as the policy holder you have the option of renewing it every year. You pay the premium according to your age. As the years go by the premium is increased because you are aging and increased likelihood of kicking the bucket. This can also be used to pay an outstanding debt in case of death.
This is a type of insurance policy that will only be active for five or ten years from the term you enter into the contract with the insurance company. This policy is mostly appropriate when you want to take care of short term insurance needs. The type of premium in this insurance policy are not that expensive, in fact they can be very affordable because you are not paying for any element of savings policy.
I personally prefer to keep insurance to its core requirements, as long as it pays out a cash sum when i die then i am happy to keep my insurance and savings separate mainly due to the absolute rubbish rates of returns on the savings elements available from many companies. Make sure you shop around and look at the guaranteed returns, or the exact terms of your policy. Do not be too quick to jump into life insurance with an investment element attached to it as its likely you can invest the extra money elsewhere for a better return.
Beware of Brokers
As you will see from my post about independent financial advisers in the UAE, be very careful before entrusting your hard earned cash to a broker who will sell you a policy based on the commission cheque they receive rather than your individual requirements. You will see in this post who I can recommend as a financial adviser and who I certainly would not recommend. View the post Financial Advisers in the UAE or ask for David Tosh at PWS.