Understanding Life Insurance Riders and Add-ons in the UAE
Life insurance riders are additional benefits that can be added to a basic life insurance policy, offering financial support during your lifetime in case of critical illness, disability, or hospitalization. These benefits provide essential coverage beyond the standard life insurance payout, ensuring greater financial security for policyholders and their families.
In the UAE, these options are available with most life insurance plans, allowing policyholders to tailor their coverage to meet their financial goals and risk factors. The UAE’s insurance market is regulated by the Central Bank of the UAE, ensuring policies comply with local laws and offer reliable financial protection.
Market Overview of Life Insurance in the UAE
The UAE Insurance market research shows that the UAE insurance sector is growing rapidly and is projected to reach $9.64 billion by 2025. It is also expected that non-life insurance will be dominant, with a market volume of $5.81 billion in the same year. The life and annuity insurance market in the UAE is also expected to see a compound annual growth rate (CAGR) of more than 9% between 2025 and 2030.
Dubai already has the largest share of insurance policies, making up 59.9% of total written policies in 2023 and the number is only expected to go up.
Common Life Insurance Riders in the UAE
Life insurance riders allow policyholders to enhance their coverage at a relatively low cost compared to buying separate policies. Below are some of the most beneficial riders available:
Health-Related Riders
Critical Illness Benefit: Pays a lump sum if diagnosed with one of the many covered critical illnesses, such as cancer, heart attack, or stroke. This also includes a Loss of Independent Existence feature, which provides financial support if the insured can no longer perform daily activities independently.
Cancer Cover: Specifically covers certain types of cancer, including Benign Brain Tumor, Ductal Carcinoma in Situ (breast cancer), and Children’s Cancer Cover.
Hospitalization Benefit: Provides daily cash benefits if the insured is hospitalized for more than a specific number of consecutive days due to illness or accident.
Disability-Related Riders
Permanent Total Disability (PTD) Benefit: Pays a lump sum if the insured becomes permanently disabled and unable to work.
Temporary Total Disability (TTD) Benefit: Provides income replacement for a set period if the insured is temporarily unable to work due to an accident or illness.
Dismemberment Benefit: Offers payouts if the insured loses limbs or sight in an accident. Payouts vary based on the severity of the loss.
Death-Related Riders
Accidental Death Benefit (ADB): Provides an extra payout if the insured dies due to an accident, with a claim period of up to 30-90 days following the accident.
Fixed-Term Income Benefit: Ensures regular payments to beneficiaries for a pre-selected term in case of the policyholder’s death before a certain age.
Additional Protection Riders
Waiver of Premium (WOP): If the policyholder becomes totally incapacitated due to illness or accident, the insurer waives all future premiums, ensuring that the policy remains active without financial burden.
Aeroplane Cover: Offers an additional cash amount with the life cover amount if the insured dies while traveling as a fare-paying passenger on a commercial airline.
Why Consider Riders?
Life insurance riders offer numerous benefits, making them a valuable addition to any policy:
- They provide extra financial protection by enhancing coverage beyond the standard policy.
- They are cost-effective and much more affordable than buying separate policies.
- They let a person personalize the coverage according to the needs and financial risks.
- They offer flexibility to the policyholders to adjust coverage based on changing financial needs.
How to Choose the Right Riders in the UAE
Selecting the right riders requires careful evaluation of financial needs and risk factors. Here’s how to make an informed decision:
- Assess Your Needs: Identify potential financial risks and choose riders that provide the most relevant coverage.
- Compare Providers: Different insurers offer different benefits and terms—research thoroughly before selecting a policy.
- Understand Policy Terms: Carefully review exclusions, waiting periods, and claim conditions to avoid surprises.
- Check for Shariah Compliance: Ensure the policy aligns with Islamic finance principles if required.
- Consult an Expert: Seek guidance from a UAE-based financial advisor to make an informed decision.
- Plan for the Future: Choose riders that offer long-term security, ensuring comprehensive protection for years to come.
By selecting the right riders, policyholders can ensure that their insurance plan provides complete financial protection tailored to their needs. If you need more information on life insurance riders and add-ons, call New Age Insurance Brokers LLC at +971 4 3573378 or email info@newageib.com.
