In Dubai, health insurance is mandatory, but residents are not required by law to insure their lives. However, with this pandemic an ever-increasing number of Dubai residents are seeing the emotional and financial havoc death can cause to a family. Hence there is a growing recognition of the significance of buying a life insurance policy.
Life insurance companies in Dubai can protect your family from financial difficulty due to the premature loss of an income earner or the stay at home spouse. Choosing the right policy for your specific need can be confusing with the range of options and providers available.
Buying life insurance in Dubai is not without its pitfalls. Mistakes can lead to situations where the expected payout doesn’t materialize, or it might not cover all the angles or meet all the requirements. Here are some of a few common mistakes that you need to avoid when buying life insurance in Dubai.
- Not doing a proper financial plan
Buying an insurance policy without thoroughly assessing your current financial situation and your future financial obligations is a mistake that generally everyone makes. It is highly unlikely that you will get the appropriate cover for your specific needs if one does not sit down and properly calculate the various financial commitments that would need to be fulfilled in case of death. Also, without a proper financial plan, one would not be able to identify the right budget to set aside for this project. Hence, before selecting a product or a cover, one should sit down and prepare a proper financial plan.
- Choosing the wrong type of policy
Before buying life insurance in Dubai, you need to understand the different types of policies available. A term policy pays out a specific death benefit and runs for a set period, e.g. for a 20-year policy, one pays for 20 years and gets a cover for 20 years. On the other hand, a permanent life insurance policy stays in place indefinitely throughout life and allows you to build cash value that can be drawn against later.
A term policy is ideal if you want a low-cost cover and don’t expect any returns from the policy. A decreasing term policy is a sub-set of a term policy wherein the cover reduces over a period of time. This policy is typically suitable for a mortgage. A permanent policy is an excellent choice if you want a plan that will earn some returns on your investment.
- Not reviewing the insurance policy on a periodic basis
People think that they have to buy a policy once and never have to look back and that is incorrect. As you go through various stages of life, your insurance need will change. So, reassess your insurance needs with every significant change in your life such as a marriage or having a baby. This will ensure that your coverage matches your actual requirements.
Also, in case of a permanent life insurance policy, one should periodically assess how funds in the portfolio are performing and if any adjustments need to be made before it is too late.
- Treating insurance as a short-term investment
Treating life insurance exclusively as an investment and expecting rapid returns is not advisable. Exiting the policy far in advance of the maturity date can potentially result in significant surrender costs. Hence, you should treat life insurance policy as a long-term financial commitment and have the discipline to stick with it.
- Only comparing rates
Firstly, people make a mistake of choosing a policy based on the lowest price they see, opting for less benefits than they actually require, and that leaves their dependants out of pocket in a time of need.
Thus, the cheapest plan based only on your age and desired payout sum may not serve you in the long term. It is essential to compare rates and the benefits from several insurers and assess the difference in coverage. After that, review your budget to see what you can cut back on, rather than choosing less than sufficient coverage.
Buying a life insurance policy without reading the fine print can lead to disappointment later. For e.g. when you find that the premiums you have paid on a term policy did not accrue cash value. Therefore, it is best to consult professional insurance brokers, ask a lot of questions and ensure that you understand the benefits of the policy you are buying before signing.
Over the years, medicines have made immense advancements, and that has led to an increase in life expectancy. On the other hand, there is an increase in the cost of medical treatment.
In the UAE, regardless of the profession and age, health insurance is mandatory. As people age, the list of ailments increases and the risk of repeated hospital visits are more. Considering the rising cost of healthcare services in Dubai, it is better to buy separate medical insurance for your elderly parents.
But before getting your parents a health insurance cover, there are a few factors to consider.
1. The Age Factor:
The age of the person insured is the biggest difference and barrier to entry between health insurance for senior citizens and health insurance for younger people. Since health insurance is mandatory in the UAE, insurance companies cannot decline cover to any person regardless the age of the parents.
2. In-patient hospitalization:
In-patient hospitalization coverage is given by the insurance company, for the medical expenses incurred by the policyholder when they get admitted to the hospital. It should cover hospital expenses like medical tests, doctor fees, medicine etc.
You need to look at the sub-limits for certain expenses. Since the number of hospital stays might be higher for a senior citizen, it is essential to choose an insurance that gives your parents maximum in-patient coverage.
3. Pre-existing Illness:
Pre-existing medical conditions or diseases means that an individual is suffering from a medical condition before taking a health insurance policy. If your parents have pre-existing illnesses, check for the terms and conditions regarding pre-existing illnesses when looking for a health insurance policy.
Pre-existing limit depends on the underwriting evaluation of each insurance company. If a pre-existing condition was declared during the time of application, coverage will for the same depend on the approved limit. For Dubai visa holders, the minimum limit for pre-existing and chronic conditions is AED 150,000 even if the total sum insured is AED 1 Million for some insurers. For Northern Emirates visa holders, pre-existing and chronic condition cover is not mandatory. However, it is mandatory for those living in Dubai and or Abu Dhabi.
4. Waiting Period:
The waiting period will restrict your parents to get risk cover for a certain period, especially for pre-existing and chronic illnesses. Waiting period depends on which Emirates the visa was the insurance policy issued. For Northern Emirates, some insurance companies require 1 year or 2 years waiting period. Once this period is over, your parents become eligible to get the required insurance cover. When looking for health policy for your parents, consider a policy that has a lesser waiting period for pre-existing illnesses.
5. Sum Assured:
Senior citizens are more prone to health risk than younger people. So, you must try and get them a sufficient size of health insurance cover. When looking for health policy for your parents, assess the existing ailments and future risks to determine the exact health cover requirement.
However, some companies put a limit on the maximum health cover allowed for the senior citizen which is equivalent to the minimum limit required by the relevant regulatory authority. For eg: the minimum limit in Dubai is AED 150,000 and in Abu Dhabi, it is AED 250,000. In such cases, one may look at more high-end plans which provide higher covers but at higher costs as well.
You should know that there are other factors to consider when buying the insurance policy like room rent allowance, out-patient expenses etc. However, to select the best health insurance policy for your parents, you can contact us. We at New Age Insurance Brokers will be more than happy to support you with the same.
Retirement planning is the financial support, in form of savings and other physical assets, for financial independence in your old age. It is aimed at giving you a relaxed lifestyle with enough money in your hands so that you can live the way you want without being a burden on anyone else. Retirement planning starts with planning your retirement goals such as where you want to live, how much you want to travel etc., and how you are going to fund them. It is a multistep process conducted over a period of time during your working days so that you can have a secure, comfortable, and fun life after your retirement.
Retiring at 60, cannot be taken for granted anymore. Advances in health care mean we are living longer lives and for long lives, we need more money. So, most people who don’t plan their retirement end up working well into their 60s and sometimes even into their 70s. Working for the fun of it is one thing but working out of compulsion, just because one didn’t plan sufficient finances takes a toll on one’s golden years. It is always a better idea to plan for your financial independence even if you have a supportive and caring family because you never know how people change and perhaps even if the right intention is there, family members may just not be able to support you financially in your old age if they have their own family commitments. Many people suffer a lot during their retirement when they are forced to live alone without proper financial support. This is why you need to be prepared for all kinds of situations and think seriously about your retirement goals.
Retirement planning is the process of identifying your retirement goals, expenses, savings, emergency situations, and your sources of income for a secure and independent life. Here’re some key reasons why you need to plan for retirement.
Medical emergency: Retirement planning means you are planning your life after the age of 60 that means different health problems may arise with rising age and you should be prepared for that. Medical expenses are the biggest financial support that someone needs in post-retirement life. With enough savings and a good medical insurance plan shall mean you will be well-taken care of during any emergency medical condition.
Your pension plan: Private sector employees usually don’t have any state-sponsored pension schemes like government sector employees and they should plan it by themselves. Pension is like your regular income post-retirement to pay for your day to day expenses. You can invest in different investment plans or buy a retirement plan that guarantees monthly pension after your retirement at a certain age. If you are on your own, a pension is like your social security during those days.
You are your own family: Long gone are those days when families live together and support each other. With a rapidly changing family culture, you need to plan for your monetary support and social security to ensure that you will have enough savings for staying separately. In today’s competitive lifestyle, children are also forced to achieve more in their life and sometimes even they have to relocate to another country for their jobs. You should also consider this scenario while planning for retirement at 60.
You can start your retirement planning at any stage of your professional life. The earlier you plan for this the smaller amounts you need to put away to secure your future. The later you start, the harder it gets. Now is a good time for you to start planning for your golden years. This is the best time to determine your retirement planning goals and investment strategies. You can contact New Age Insurance Brokers and one of our qualified financial advisors will help you with your retirement planning and financial strategies for a secure and financially independent post-retirement life.
Accidents, as the name suggests, are inherently unpredictable. They can happen anytime and anywhere – whether you are at home, at work, or even on vacation. A small slip in the house, accidental tripping on a staircase, injuring yourself while playing football, or a road accident can have long term implications for you and your family. As per the facts released by WHO, approximately 1.35 million people die each year as a result of road accidents. Far more are injured. These injuries can be temporary or permanent.
Accidents leading to disability, death, or long-term illness can make you and your family emotionally and financially weak. So, while one cannot predict an accident, one can definitely be prepared for the same. Personal accident cover can soften the financial impact of such an unfortunate event. Let’s see how.
What is Personal accident insurance/cover?
Personal accident insurance is a policy that offers financial compensation or reimburses the medical cost in case of total/partial disability or death caused by accidents. In case you meet with an accident and get disabled or lose your life, the policy will ensure financial stability for you and your family, respectively.
Major areas that are covered under Personal accident insurance are:
- Death after the accident- It’s an unfortunate but bitter truth. You might lose your life after a severe accident. In such a case, the nominee in your policy will get accidental death compensation. So, you should always add the name of the nominee while applying for the personal accident cover.
- Total disability- An injury or condition may result in total disability, preventing you from performing any work at all. It is a severely debilitating situation whereby you are not only losing your ability to work and thereby earn income but also requires major medical expenses and increases your cost of living expenses as many adjustments need to be made in the house to allow you to live comfortably. In such circumstances, a personal accident cover can not only cover medical expenses but also provide monthly payout to compensate for the loss of income and additional expenses.
- Partial Disability- Partial disability, while not that severe, can still result in one’s reduced ability to perform all physical functions. Reduced physical functions can impact one’s ability to earn and might also require some minor accommodations to be made to allow one to work and live at fuller capacities. As in total disability, personal accident policies can payout for both medical and non-medical expenses, related to the partial disability.
Depending on the kind of personal accident policy, in some cases, the insurance companies pay for the transportation expenses that were incurred by your family to reach the hospital. Also, the policy covers hospital costs, including ambulance costs, funeral expenses, and pays for your vehicle alteration.
What should you consider before taking the personal accident cover?
• Assess the coverage of the policy to ensure that you are extensively protected after the accident – both for medical expenses and loss of income and/or increased expenses.
• Track the record of claim settlement of the insurance company to know about its quality and reliability.
• Apply for the policy that offers coverage abroad so that you are secured even outside your home country.
• Learn about the claim procedure so that it’s quick and hassle-free at times of emergency.
Amid physical trauma and increasing medical expenses after an accident, a personal accident insurance policy provides peace of mind. We at New Age Insurance Brokers can work with you and your families to provide the right kind of cover.
Partnership insurance is a well-designed insurance plan for businesses that are run by two or more partners.
In the UAE, numerous businesses are set up as partnerships. However, rarely do the partners realize the implications of what would happen to the business and the family members if one of the partners gets severely ill or dies. Would the business suffer a loss either through reduced revenues or monies stuck in the market? Would the deceased partner’s shares get passed on to their next-of-kin who may not be interested in running the business at all or might not have business acumen and technical skills to support the business like the previous partner?
Fortunately, policies like partnership insurance allow for partners to be ready for this eventuality. This type of insurance also safeguards the business in the scenario where one of the partners survives the accident or illness but chooses to leave the company.
Is it necessary to buy partnership insurance?
Understandably, no one wants to think about tragic events while running a business with a partner. But, not planning for it properly might result in undesired outcomes after an unfortunate event in the future. Not being prepared for such events means your business can fall apart quickly once your partner gets out of the business due to any of the following reasons.
In case of the death of one of the partners, a partnership insurance plan will give the business a cash payout. It will allow the remaining partners to buy the shares back from the family of the deceased partner to regain full control and business continuity. This is beneficial for the deceased partner’s family as well as they are able to liquidate their holdings in the business and live a dignified life in the absence of their family member.
In addition, this lumpsum payout enables the remaining partners to find a suitable replacement (partner or an employee) and bring him/her on board without worrying about hefty salaries as the business will have the luxury of cash sitting in the bank account.
The cash flow resulting from the death of a partner, into the business, also gives confidence to the vendors, clients, and other business partners that the business will be able to tide over difficult times and come out stronger on the other side.
If one of the partners falls critically ill, then a cash payout is made to the company. This helps the business in many ways. Firstly, it enables to critically ill partner to get medical attention and be able to take the time off without a significant impact on his personal finances. In addition, if the partner needs to take a medical leave of absence or is working with the company at reduced capacity, it enables the business to hire the necessary people for the business operations to go on as smoothly as possible.
In short, a partnership insurance policy is a guarantee that your business would be least impacted by the death or illness of a partner and that the business can carry on its operations profitably.
At New Age Insurance Brokers LLC, you will find the most trusted insurance advisors who will help you to make sure that your business remains protected should any partner of your business get out of the equation. To know more about partnership insurance, feel free to contact us at firstname.lastname@example.org.