What is term insurance and why I should buy one?

Life insurance is a crucial component of an expat's financial plan. It helps you protect loss of income, liabilities, important financial goals and dreams you may have for your loved ones.

Term Insurance is one of the popular forms of Life Insurance.

In this article:

1. What is term insurance?
2. What happens if I outlive my term plan?
3. Why buy term Insurance?
4. Which companies offer Term Insurance in UAE? 
5. How can I know more about Term Insurance?

What is term insurance?

It is simple and the most affordable form of life insurance. It provides you with life cover for a definite number of years. Typically between 10 - 35 years.

The cover amount, term and premiums payable are fixed at the start of the policy. 

You are covered until the end of the term, as long as you keep paying the premiums due. If you stop paying the premiums, the cover ceases after a certain grace period.

What happens if I outlive my term plan?

If you outlive your term insurance, then you don't get back any premiums you paid into the policy.

It is much similar to renting a house. You can live in it as long as you pay the rent agreed. If you stop paying rent, then you may be evicted. When you vacate the house, you don't get back the rent paid. 

Why buy Term Insurance?

People buy term insurance for the following reasons;

1. It is simple to understand and easy to set up. No frills, no confusion.
2. Easy on your budget - You can buy term insurance in UAE for as low as AED65 a month.
3. The life cover premiums of term insurance remain the same throughout the term of the plan
4. Not the elephant in the room - Because of the low premiums, you can also afford to invest in other financial goals
5. You can add riders like critical illness benefit, disability cover, Waiver of Premium etc.,
6. It provides global protection - Endowment and Whole of Life plans may not be tax compliant in the USA. So if you are looking to migrate to the USA, the term plan is ideal for you.
7. The claim proceeds of term insurance are tax exempt in many countries.

Which companies offer Term Insurance in UAE?

The following life insurance companies offer term insurance;

1. Zurich International Life
2. Friends Provident
3. MetLife
4. LIC International
5. Salama - Islamic Insurance
6. Orient Insurance
7. Oman Insurance

How can I know more about Term Insurance?

As an unbiased and expert financial advisor, I can help you ascertain how much life cover you need, for how long you need it and what riders you should choose.

Arrange a Free Consultation to discuss your protection needs and, identify the best insurance plan.