Life is uncertain, and you have no way of knowing what will happen tomorrow. You could meet with a car accident on your way to work, your home could be devastated in a fire, or you could be diagnosed with a serious medical condition. These are not just grim thoughts but a reminder that you must be adequately covered against such risks.
Here are the five types of insurance covers everyone should have to guarantee peace of mind in a world of uncertainty.
Life Insurance
As an earning member of your family, your aim is to ensure their financial security. But what if something were to happen to you? Do you have a life insurance policy in place that will help your family cope financially when you’re gone?
Life insurance is a mandatory requirement if you’re applying for a home loan in the UAE. But it is also a must-have if you have dependents.
First, you must understand the different types of policies that exist and which one would suit you best. Term policies are the most affordable variant, covering you for a fixed term with a payout only in case of death within that term. Whole life policies are more expensive, providing you lifelong coverage. And then there are endowment policies that offer cash value and payout in case of death or survival. You can also enlist the services of an insurance broker or trusted financial advisor to help you find the right policy.
Health Insurance
Health insurance is one of the most crucial types of insurance to have, and it has recently been made compulsory in the UAE. All UAE employers have to ensure that their employees are covered, and sponsors have to ensure that their spouses, dependents and domestic help are adequately covered too.
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For those who earn less than AED 4,000 a month, the Dubai Health Authority (DHA) has launched the Essential Benefits Plan (EBP), which provides basic medical insurance coverage starting at an annual premium of only AED 550.
When choosing a health insurance plan, consider the overall annual coverage limit, the policy deductible or co-insurance, geographical scope as well as the network of covered hospitals. Also make sure to read the fine print regarding exclusions, as well as conditions related to the treatment of chronic conditions.
Home Insurance
Incidents of fires in residential buildings have grabbed the attention of UAE residents over the last few years. But it shouldn’t take a fire to drive the point home that all of us – homeowners and tenants – must insure our home and its contents.
A comprehensive home insurance policy covers not only the actual building, but also the contents of your home as well as your personal belongings. Tenants can simply opt for home contents insurance.
According to a 2017 analysis by Souqalmal.com, the average cost of home insurance for tenants was 0.6 percent of the value of insured contents and belongings. This was even lower for homeowners – 0.06-0.08 percent of the value of the building, contents and belongings.
Car Insurance
Like health insurance, car insurance is a mandatory requirement for all car owners in the UAE. And since you’re going to be getting a car insurance policy, why not choose one carefully that gets you the best value for your money?
You will first have to choose the policy type – third party or comprehensive. Third-party insurance only covers you against any legal liability to a third party, while comprehensive insurance, additionally covers damages to your own vehicle too. The wider coverage under comprehensive insurance naturally comes at a higher premium too. You can even add or remove the optional features in a comprehensive policy, like coverage for off-road driving, windscreen damage, damage due to natural calamities and so on.
Travel Insurance
Traveling abroad is exciting, but it does come with its fair share of risks. What if you lost your luggage while traveling, or your passport? Or met with a medical emergency?
[Related: Picking The Best Travel Insurance Credit Card]
It’s best to apply for a travel insurance policy before you jet off to your dream destination, to be able to enjoy a worry-free holiday. Based on how frequently you travel, you can pick a single-trip or a more economical multi-trip travel insurance policy. You can even opt for add-ons like a winter sports cover or a golf cover to match your specific holiday needs.
