Why aren’t people in the UAE getting Life Insurance?
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Why aren’t people in the UAE getting Life Insurance?

A recent survey has revealed that, while most people in the UAE have Health Insurance, they have been slow to take up Life Insurance and Critical Illness Insurance plans. What is the reason for this, and why are these types of insurances so important anyway? Find out more here.



If you are a UAE resident who lives in the emirates of either Abu Dhabi or Dubai, then you most likely have health insurance. This is because both emirates now have laws in place that make possessing health insurance mandatory for every individual within their territories, whether they are a native Emirati, expatriate, or even just a tourist. In the other emirates, however, such health insurance legislation has yet to be enacted.  For the time being, people are able to live without health insurance in these areas without any kind of negative consequence, although there is plenty of speculation that similar laws are coming down the pike for the entirety of the UAE.

Besides, shouldn’t everyone want to be protected from medical debt with a formidable medical insurance plan? Of course they do. That’s why those with the means to do so purchase their own private health insurance plans for themselves and their families. But is this the case for other types of insurance?

As it turns out, there are a couple types of insurance that, while potentially very beneficial to individuals and their families, are not being obtained by large swaths of people in the UAE. Unlike health insurance in Abu Dhabi and Dubai, Life Insurance and Critical Illness Insurance policies are not mandatory anywhere in the UAE, even though they can be of great benefit. Here, UAE Medical Insurance examines the situation regarding the adoption of these types of insurance by the population of the UAE, as well as why they can be so beneficial.

The lowdown on low insurance adoption

A recent article highlighted some survey findings that might be seen by some as somewhat alarming. When it comes to Life Insurance in the UAE, 58% of people simply have no coverage at all. What makes this figure even more troubling is that the same survey from the previous year found that 48% of Emiratis held no Life Insurance. To be sure, a drop of 10 percentage points in this figure over the course of a year is certainly not the direction that insurance companies or government officials would like to see. Additionally, only 21% of the population currently holds Critical Illness Insurance.

So what is leading to this lack of coverage? Well, the number one reason given by respondents to the survey as to why they didn’t obtain Life Insurance was that it is simply “too expensive” for them (32% of respondents made this assertion). The second most common reason cited was that the respondent was “not familiar with the concept of life insurance” (26%). These same factors were cited as the top reasons for not obtaining Critical Illness Insurance, except the ‘not familiar with the concept’ was #1 (37%) and the cost was #2 (28%).

As far as the cost is concerned, this factor is unlikely to improve for people in the future, since insurance premiums generally have a tendency to rise year-over-year in order to keep up with inflation and other market factors. The other point, however, shows that there is great room for improvement. This is because, if there is truly a lack of understanding of what Life and Critical Illness Insurances are, a little education is all that is needed to help people understand how important these two types of insurance can be.

It’s all about the definition

It really comes as no surprise that some people may not grasp the concepts of Life Insurance and Critical Illness Insurance. Beyond the fact that some may simply not be familiar with the products, even once a little knowledge of them is gained, it may seem strange that these are products you buy hoping that you will never have a need for them. For this reason, it is up to insurance companies in the UAE, and perhaps the national government itself, to do what they can to promote the benefits of these types of policies, so that families in the country are protected from catastrophe. To start the process, here are our definitions for these two types of insurance.

Life Insurance defined

For the unfamiliar, Life Insurance, oddly enough, is an insurance policy that is payable upon the insured person’s death. It provides a lump sum payment to the people named on the policy (called beneficiaries), who are, more often than not, the living family members that the insured person has left behind. This money can be used to cover family costs as they adjust to life without the insured person’s presence, including living costs, funeral costs, rent/mortgage payments, education costs and more. Another benefit of a Life Insurance policy is that benefits are normally tax free to beneficiaries.

Life Insurance policies are often created with a term in place, which is like an expiration date on the policy. Under this type of term policy, at the end of the term, depending on the age and health of the insured, premiums may increase significantly upon renewal of the policy, or the insurer may even refuse to renew the policy at all. This is where a lifetime renewable policy without a maximum age would be advantageous if one can be obtained.

Critical Illness defined

Critical Illness Insurance is similar to Life Insurance in that it pays out a lump sum amount. The obvious difference is that the insured is still alive when this occurs. This is because Critical Illness Insurance policies pay out when the policyholder is diagnosed with one of a specific list of very serious illnesses or conditions. This list may differ from policy to policy, but common ailments seen within include the following:

  • Alzheimer’s disease

  • Blindness

  • Cancer

  • Cardiac arrest

  • Deafness

  • HIV/AIDS

  • Kidney failure

  • Multiple sclerosis

  • Organ transplant

  • Paralysis

  • Parkinson’s disease

  • Terminal illness

When these types of potentially debilitating conditions threaten to greatly decrease a person’s quality of life, Critical Illness Insurance benefits kick in to alleviate some of the financial hardship that can occur. Funds can be used to replace lost income due to not being able to work, cover costs for treatment, help buy equipment for the home that may be necessary due to the nature of the insured’s condition, and more. Sometimes a Critical Illness Insurance plan will separate the benefit payment, paying some upon initial diagnosis of a disease, and the rest should the insured pass away.

As you can see from the above, Life Insurance and Critical Illness Insurance can be real life-savers when it comes to addressing costs in times when your family’s financial well being is imperiled. For this reason, people in the UAE should be considering whether these types of insurance plans are right for them.

To find out for sure, contact the experts at UAE Medical Insurance today. They will not only answer any questions you may have, but they can also provide you with comparisons of insurance plans from a number of different insurers and give you a free price quote for each.

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UAE-Medical-Insurance is owned and operated by Pacific Prime Insurance Brokers LLC who is regulated and licensed by the UAE Insurance Authority (license number 266).

Registered Office: PO Box 391195, Dubai, UAE