Selecting a life insurance plan can be pretty overwhelming as it forces you to ponder on things that you do not really wish would happen when it comes to your life, for instance, the effect of a person’s death on his or her family. Then, there are a whole lot of options and additional costs.
There are many people who do not have any type of life insurance even when they are the breadwinners of the family and their death will have a bad impact on their family’s financial future.
Here we have listed some of the basics that you must know about while selecting the best life insurance in UAE without causing a hole in your pocket so that you can ensure the required protection.
First, let us see what exactly is life insurance?
Life insurance is an agreement between an individual and the insurance company in which the individual agrees to make payment of the premium in return for the insurer’s commitment of paying a certain amount of money to the person(s) of his or her choice in the event of his or her demise.
- The amount that the insurance provider agrees to make payment of is called the death benefit.
- The person receiving the amount is called the nominee orthe beneficiary.
What are the reasons to get a life insurance policy?
The actual reason for getting life insurance is for securing the wealth and lifestyle for the family or the selected beneficiary after the death of the insured individual. There are various other advantages too. Listed below are the most common reasons for getting a life insurance in Dubai .
- For making payment of the funeral costs, unpaid hospital and medical bills, student debts, and other types of debts remaining after the demise such that the family doesn’t have to handle the burden.
- For leaving funds behind for the spouse or family so that they are able to maintain the lifestyle that they are used to.
- For leaving an inheritance, provide funds for the kid’s college, donate money to charitable causes, or clear a mortgage.
- For securing a mortgage or other debts whenever the lender needs it.
- For building wealth, as it happens while using a life insurance plan with the options of investment.
What are the different kinds of life insurance plans?
There are 2 major types of life insurance plans- permanent life insurance and term life insurance. Within the term insurance category, people get to select a life cover for a specific duration. Within the category of permanent life insurance, the duration of the plan is for the duration of your “life”.
In the latter’s case, you have some of the options the policy is able to offer. Listed below are the different kinds of life insurance plans for helping you in understanding the choices.
- Term Insurance: It is bought for a specified time period, generally between ten to thirty years duration, without any cash values & expires when the term ends, unless the plan is convertible. Also, this type of life insurance is the least expensive option.
- Universal Life Insurance: This is a kind of permanent life cover that offers options for investment. The premium amounts masssy be adjusted with time-based on the way you decide to manage it. The factors include cash values, investments, and other alternatives like borrowing from the life insurance plan.
- Whole Life Insurance: This type of insurance has a pre-decided premium amount and remains valid as long as the policyholder is able to make payment of the premiums. Whole life insurance is also a part of permanent life insurance.
Selecting combination or convertible options for life insurance
The combination life cover plans offer you the option of having a payoutin the situations apart from just death. Now, it is becoming more popular for the people to select a life plan, which combines with the other coverage like long-term care insurance.
In the case of convertible life cover plans, you are allowed to begin with a term life plan and then you can convert it into a whole life plan instead of leaving the plan when the term ends. This can save you from having to go through a medical examination when a person converts to a whole life.
What are the pros & cons of a life insurance plan?
Pros
- The peace of mind and financial security for the spouse or family
- The flexibility for using the funds from life cover as the nominee considers fit
- Fixed premiums such that you know what you have to expect within your budget
- When it comes to permanent life insurance, the chances of saving money through investments (it may also give you the option of borrowing funds from the life plan later if needed)
Cons
- In the case of term life, when the term ends, if the death benefit is not payable, all the premiums paid in the plan get lost
- When it comes to whole life plan with universal life or cash values, options for investment don’t yield the best possible returns
- In case you do not make payment of the premium, the policy gets canceled and you might have to go for a new life cover plan, subject to the current age, and a fresh medical examination.
Deciding the amount of life insurance required
Because people purchase life insurance for many reasons, the amount you require will be based on the reason you are purchasing it. In case you are looking for securing the financial safety of your family or loved ones in case you pass away unexpectedly, then you’ll have to review different personal factors for helping you figure out the amount you need.
Life Insurance Cost
A life insurance policy could be as inexpensive as some of the dirhams a month to hundreds. A majority of the life insurance providers offer many payment options for helping in making payments more affordable. However, some of the millennials tend to over-estimate the price of life insurance that may feed into the rising hesitation of buying it.
The prices of a life insurance plan are dependent on some factors like-
- Age of the applicant
- Health conditions or health including whether you smoke or not; you will also have to go through a life insurance medical test for being eligible for the insurance plan
- Amount of death benefit offered on the plan
- Tenure of the life insurance policy- generally, permanent life cover is more expensive as compared to term life cover
- Whether the policy includes cash values or not
Altogether, it can be said that the healthier and younger you are, the less costly the life plan is.
In a Nutshell!
There are many options to select from when determining what type of life insurance you require. Your personal circumstances and age will prove to you the kind of life coverage is the most needed for you and the amount you are able to afford. Here’s how you can choose the best life insurance in UAE.
- Taking into consideration that term insurance could be used for short-term requirements in combination with permanent or convertible life insurance options for saving money, particularly when you begin with.
- Getting opinions of licensed life plan or financial advisors while making the choices is recommended strongly as it might help you in finding ways for affording the suitable kind of cover and make sure you do not end up living without life insurance as you are stressed about the prices
- Always research and review the life insurance options every few years or whenever the family situations change, including the death benefit amount and who the nominees are
YOU SHOULD NOT MISS THESE HEADLINES FROM NIGERIAN TRIBUNE
Nigeria’s Economy Shrank By 6.10% In Q2 2020 — NBS
NIGERIA’S Gross Domestic Product (GDP) in real terms declined by -6.10 per cent (year-on-year) in Q2 2020, thereby ending the three-year trend of low but positive real growth rates recorded since the 2016/17 recession. This is according to the second quarter (Q2) GDP report, released by the National Bureau of Statistics (NBS) on Monday. When compared with Q2 2019, which recorded a growth of 2.12 per cent, the Q2 2020 growth…Mailafia Sues Police, Shuns Invitation
FORMER deputy director, Central Bank of Nigeria (CBN), Dr Obadiah Mailafia, has taken the Nigeria Police before the Plateau State High Court, asking the court to restrain the police from inviting him to appear before the Deputy Inspector-General (DIG) Force Investigation Department, Police Headquarters, Abuja. After two consecutive invitations and interrogation by the Department of State Services (DSS) over his…My Four Weeks Battle With COVID-19 —Segun Awolowo
While many people still express the belief that COVID-19 is just hype, the executive director of the Nigerian Export Promotion Council (NEPC), Segun Awolowo, while narrating his four weeks battle with the virus, has called on people to take the virus seriously, be conscious of the infection and follow laid down preventive measures, adding that fear is the real killer for infected people. Yejide Gbenga-Ogundare reports…Mali Junta Wants 3-Year Military Rule, Agrees To Free President
THE junta that seized power in Mali wants a military-led transitional body to rule for three years and has agreed to release ousted president Ibrahim Boubacar Keita, a source in a visiting West African delegation said Sunday. “The junta has affirmed that it wants a three-year transition to review the foundations of the Malian state. This transition will be directed by a body led by a soldier, who will also be head of state,” a source in the…
and then