A year on from the start of the pandemic and COVID-19 is still driving demand for life insurance. Over the course of the last year, the pandemic has caused many to re-evaluate their finances as they realise that the unexpected can, and does, happen. People have realised that they need to prioritise the financial wellbeing of their loved ones in case they are afflicted with an illness of suffer an unexpected loss of life.
COVID-19 Driving Demand.
Life insurance typically has a low uptake in the UAE. But, according to a recent Zurich survey, life insurance is now the top financial priority for many UAE residents, with over half of the respondents saying that they were planning to buy a life insurance policy during the pandemic.
‘It’s not surprising that there has been a rise in enquiries for life insurance policies in the UAE’ says Ian Featherstone, CEO of IAE Insure. ‘Even a year on from the start of the pandemic, enquiries are still much higher than they were beforehand. People have heard horror stories from those getting hospitalised as a result of COVID-19 and the associated costs they have been left with which can be extremely expensive, especially if they need to be admitted to the ICU.’
‘Because of these high costs, there’s a real need for protection for many UAE residents, especially amongst the expat population. In the event of your death, your loved ones often have to pay expensive repatriation costs. And, after the costs of a prolonged illness, expenses can quickly reach exorbitant sums. This really exasperates the need for life insurance and protection products amongst the expat community.’
Choosing a Policy.
With recognising the importance of a life insurance policy comes the difficult decision of which policy to choose. While the best way to decide is always to discuss your circumstances with an expert insurance broker, here is a brief overview of the two most popular types of policy: term insurance and whole life insurance.
In short, term insurance is a policy that lasts for a fixed term. The sum is paid to the policyholder’s nominated beneficiaries if they die during the term. Whole life insurance lasts for the entire life of the policyholder and the sum is paid to the policyholder’s beneficiaries upon the death of the policyholder. Deciding which to choose can be difficult. Term insurance is usually cheaper, although the premiums can be high for older customers or those with health conditions. Whole of life insurance is more expensive but offers more assurances.
Which you choose depends on your personal preferences and your situation. Term insurance is incredibly flexible and allows you to add more coverage if your situation changes (for example, you have children or get married). With whole life insurance, things are more stable, and no other policy will give you this many guarantees. The cost of this assurance is higher premiums early in the term of the policy (however, if you renew your term policy, premiums are likely to reach similar prices).
For younger customers or those looking to invest, we usually recommend term insurance because it’s relatively inexpensive, flexible and the savings you make can be invested elsewhere. However, it’s important to assess which policy is best on more than just this. For example, other life goals, lifestyle etcetera. To truly get the right policy, it’s best to go through an expert broker who can take the time to look at your circumstances and help you to decide what’s best for you.
If you’re concerned about whether you have enough cover or want to discuss what policy is right for you, contact IAE Insure today at firstname.lastname@example.org or call +971 4 396 1878 for a FREE no obligation quote. Visit us at www.iaeinsure.ae.