What Millennials need to know about life insurance?

Life Insurance

“Life insurance is the last thing that comes to my mind when planning for the future; after all, there are a lot of attractive investment options including investments in bullion, stocks and mutual funds.  Why should I invest in life insurance now, when I am active, hale and hearty?”

Sounds like what you or your friends would say about life insurance?

Especially when we are living longer and longer, there is a genuine question around why one needs life insurance. Let us explore the four reasons why we believe millennials need life insurance now more than ever before. Read along.

Sure – You don’t want your family to reel under debts that you procured?

As you grow older, you might acquire some form of a loan or the other. It could be an education loan, some have car loans, some have home loans etc. Due to an untimely death, the burden of these loans can fall on your family: old parents or your spouse and children, as the case may be. A life insurance policy will prevent your family from being saddled with loans they may not have planned for, and possibly cause their financial ruin.

Ensure your family’s dignified living even after death

Life insurance is an income replacement tool. Your income helps run the household, pay for education and healthcare and even help build a kitty for retirement and medical expenses that come with old age. Your untimely departure will jeopardize your family’s ability to sustain the same or a reasonable standard of living as expenses will continue but the incomes supporting that would have stopped.

Even in the case of a non-earning member of the family, there is a financial value that is attached to all the work that the spouse takes on and is responsible for. If the spouse meets an untimely departure, you should expect expenses related to child care, care of the elderly and running of the household to dramatically increase.

Thus, life insurance helps your family to lead a respectable life in case you are not around.

Employer’s Insurance – Is it enough?

Group Life Insurance plans are only now coming into vogue in the UAE.  However, even if you are employer provides this benefit, these life insurance plans remain alive as long as you are employed with that particular employer. If you leave the job or are laid off, you are automatically removed from these Group Life Insurance plans.

Additionally, workplace coverage may be more than enough as long you have no dependents. But if you have dependent parents or need to financially take care of your spouse and children, then the employer’s insurance policies typically fall short.

Cannot afford it? Think again

One of the common misconceptions surrounding life insurance is that the cost of getting insured is high.

Yes, that can be true in some circumstances but if you are young and healthy, premiums can be as cheap as a cup of coffee a day!  Unfortunately, when we are young and healthy, we assume we will always remain healthy. But health deteriorates over time, accidents do happen and we are susceptible to genetic health risks. It has been rightly said, “Good health buys you life insurance and money only pays for it” So the right time to buy life insurance is precisely when you are young and healthy.

Still unsure about getting life insurance? We understand the hesitation and perhaps you have a lot of questions that you need to be answered before you are able to make up your mind on this one. Our qualified professionals at New Age Insurance Brokers believe in educating our clients and can help draw out a financial plan that will work for you. As a leading insurance broker in UAE, having tie-ups with the most insurance companies in UAE, we will work with you to secure your future. You can e-mail us at info@newageib.com or call us at 04-357 3378 for a free financial health check-up.

Workmen’s Compensation or Group Life: which to choose and why?

Workmen's Compensation Insurance

Workmen’s compensation and group life insurance policies are essentially rewarded packages that are beneficial for both the employees and employers as it helps employees to replace income at minimal cost to employers at the time of need. We will describe the benefits of both workmen’s compensation and group life insurance and highlight the differences so you are able to assess what reward package makes the most sense for your company.

Workmen's Compensation Insurance

What is Workmen’s Compensation Insurance?

Workmen’s Compensation Insurance also known as Employer’s Liability insurance is a liability policy to compensate employees for bodily injury or death due to accidents or occupational disease arising out of and during the course of employment.

In the UAE, the Federal Law has mandated employers to provide employees with medical, disability and death benefits for any accident, injury or death caused at or by the workplace. Without adequate cover, your company may be liable for large payouts encompassing medical, loss of earnings and related costs.

At the time of a claim, the payout of the policy depends on the medical bills and other claim documents submitted to the insurance company subject to the agreed terms and conditions stipulated in the policy.

What is Group Life Insurance?

Group life insurance policy is a life insurance product to cover a group of people under a single contract. Just like workmen’s compensation policy, in a group insurance contract, the policy owner is the employer or an organization, and the policy covers employees or members of that particular organization.

A group life Insurance differs from workmen’s compensation as it provides a lump sum payment, as opposed to payments based on claims with specific limits, in the event of an employee’s death or permanent disability due to accident or sickness.

While not mandated by law in the UAE, group life insurance is one of the best ways in which an employer can instill a sense of security in the minds of the employees. Most employers often pay for the basic group life insurance themselves without burdening the employees. If the employees want additional benefits like critical illness coverage, then they may pay extra for the supplemental benefit.

Another advantage of group life insurance is that it is not territorial like workmen’s compensation insurance. Employees are eligible for the coverage worldwide, including their home country. In addition, the group life covers employees 24 hours a day, 7 days a week, 365 days per week. In short, employees are covered whether they are on duty or off duty, unlike basic workmen’s compensation policies which cover employees only during working hours.

In UAE, the employer can opt for a group insurance policy provided there is a minimum of 11 members working for the company.

So what should you choose for your employees?

Workmen’s compensation in case of a work-related accident is mandatory in UAE and an insurance cover is the most cost-effective means for an employer to meet this potential liability.

However, for a low cost, your company can opt for group life insurance that enables comprehensive coverage for your employees thus strengthening your image as a caring employer which in turn helps with employee retention. There are some group life covers that can also help you meet your workmen’s compensation obligations as required by the Federal Law.

Still unsure on which insurance coverage to choose for your business? Our expert panel is here to help you sort things out. Get in touch with us or leave an email, we will get back to you promptly.