In its purest form, Life Insurance is simple to understand: it pays out a specified sum for the one event in life we are assured of, death. And that’s why it’s also often referred to as “Life Assurance”. It’s not a question of whether we die but when and this can be applied to the further question of “why and when you should take out life insurance”.
This article explores a few facts and FAQs that might help you answer that for yourself. After all, the decision is yours.
Is life insurance easy to get in Dubai?
A simple question to start with. Yes, there’s a whole host of insurers offering life insurance in Dubai and the UAE and amongst them, some very well-known companies. Peace of mind is surely paramount when making such a sensitive and important purchase, so you should feel reassured knowing there are well-respected brands in the local market to assist you with advice.
Does age matter? I’m young, so do I need to think about life insurance now?
A simple answer again, yes! And if you’re young, now is definitely the time for a couple of really important reasons. First, the younger and healthier you are when you buy a policy, the less it should cost! This is based on the simple premise that the longer your policy is likely to run, the greater your contribution towards policy costs are, and this drives down the price. Perhaps more important than cost considerations is the fact that if you buy today and are you’re diagnosed with a serious illness in later life, this would be covered, whereas if you’d left it late to buy and already had the condition, it would likely to be excluded and a claim denied if that was considered to be the cause of your death.
How long does a life insurance policy last then?
There are two main types of life insurance: term life and whole of life. The first provides cover for a fixed period, known as the term, and policies such as these are often used to run in parallel with specific financial commitments, like a home loan. The second type, whole of life, runs from the date of inception until the death of the insured person(s). Dependent on whether this is a single life or joint life policy (eg. husband and wife) this can either be set as first death or second death, depending on when and how you want the policy to pay out.
Are there specific reasons for me to buy a life insurance policy?
Life insurance policies are taken out by most people to protect the loved ones they would leave behind on passing away. These typically include a dependent spouse and children but could also extend to other relatives too. With a high percentage of people these days having little or no savings or investments, life insurance can be a low-cost option to help a family cope financially after the death of a breadwinner.
Is it possible to cover my spouse or partner under the same life insurance policy?
Absolutely! This is a very popular policy option, especially for parents of young families. Taking out a policy to cover either the death of the first insured person, means that the surviving spouse and dependents have financial assistance at a critical time: alternatively, setting the policy up on a second death basis means that children are provided for at a later stage in their lives when money could assist them with their university, marriage or home-owning expenditure.
I’m a stay-at-home parent. Do I need to purchase life insurance?
If you’re a stay-at-home parent and are taking care of your children, the impact of your death on the family would still be significant financially. Your surviving spouse who is working would need to think about alternative childcare arrangements or potentially alter their employment to accommodate the change in arrangements that your passing would cause. Both of these would have a financial impact and a life insurance policy could assist with that.
Are there any other reasons why I should buy life insurance in Dubai?
Of course! The proceeds of a life insurance policy can assist with so many different financial situations. The burden of funeral expenses can weigh heavy on surviving family members so even if you take out a low-cost life insurance for a relatively low amount just to cover anticipated funeral costs, it’s a help to those you leave behind. Other life events that can trigger a life insurance purchase include purchase of a home, an expensive vehicle, marriage or birth of a child: all of which can prove very costly if the main income provider was no longer around.