Total underwritten premiums of life assurance and operations of fund formation amounted to 7 billion Dhs in the year 2013. The share of the national companies amounted 21.8% while that of the foreign companies 78.2%, according to a The Insurance Sector Report 2013 published by the Ministry of Economy, UAE. Getting yourself life insured is perhaps the most vital investment that you will ever make. It helps to protect your family’s financial future when you wouldn’t be around to take care of them anymore.
How to Buy the Right Policy
Here are few tips that might come in handy while buying a policy.
- Decide Upon the Type of Policy – There are many types polices and the benefits under each one of the them differs. Some of the types of policies are term plan, whole-life, endowment, ULIPS and more. Only a term plan is a pure policy. In other words, it offers comprehensive cover and the entire premium goes towards the cover amount. All other types of policies have an investment portion attached to them. Choose a policy that suits your financial goals and your family’s financial needs. If you choose a term plan then pick a term that covers you up till retirement.
- Decide on a Cover Amount – Ideally, it is advised that you should take a cover amount that is 8 to 10 times your annual income. Before deciding upon the cover amount, you must take into account your lifestyle, liabilities such as loans or debts that you have to pay off, future responsibilities like your child’s education and marriage and daily expenses that your family might have to meet in future. Also take into account changing lifestyle habits and the rate of inflation.
- Premium – Get a premium calculated that is affordable. You certainly don’t want to put a dent in your pocket now in order to secure your family’s financial future.
- Add Riders – Riders are additional benefits that can be added to a life insurance policy in order to enhance the cover of the policy. You can add disability, critical illness or accidental death riders.
- Terms and Conditions – Go through the “terms and conditions” carefully and only then finalize a policy. Also, educate yourself about additional fees that the bank might charge for the services rendered.
It is highly advisable to buy a policy as early as possible. Premiums shoot up as you age and also if you are a smoker.