Asian expats most aware of life insurance

Half of the UAE’s Asian expats have invested in a life insurance coverage, but only one in five of them have a critical illness coverage, a new survey published today has revealed.

The survey of more than 1,000 UAE residents across the seven emirates, conducted online by YouGov for Zurich International Life, found out that almost two-thirds (64 per cent) of UAE residents do not have a life insurance policy that would protect their family’s financial future in the event of the death of the primary salary earner.

According to the survey, 50 per cent of Asian expats polled had life insurance even as the percentage declined to 11 per cent for Emirati nationals and 18 per cent for Arab expats. Western expats had the second best life insurance coverage, at 45 per cent, the survey revealed.

“What is most concerning about this survey is the finding that 60 per cent of people with children do not have life insurance,” said Andrew Oliver, Head of Propositions and life insurance expert at Zurich International Life.

The survey also revealed that the insurance cover of almost one-third (31 per cent) of those with life insurance was less than the annual household income while another 35 per cent had insurance cover for between one and two times their annual household income, which Zurich claims would be insufficient to cover the loss of income from the primary salary earner.

A mere 5 per cent of those with an insurance cover had it for between 5 and 10 times their annual household income while the percentage dropped to just 3 per cent with more than 10 times annual household income as insurance cover.

The report highlights that families can suffer from severe economic loss if their primary salary earner dies. “A life insurance policy provides a cash lump sum or regular income to replace the earnings that would cease at the death of the insured to pay regular bills, school and university fees, the mortgage and outstanding debts,” it noted.

The survey also found that only 20 per cent of UAE residents have critical illness insurance, also referred to as disability cover. Percentage of people with critical illness insurance (by nationality):

Western expats were the most conscious of the critical illness cover, the survey revealed, with 30 per cent of Western expats in the UAE having a critical illness cover, followed by Emirati nationals (22 per cent), Asian expats (20 per cent) and Arab expats (17 per cent).

“Critical illness insurance pays out a lump sum or a regular income if you are diagnosed with a serious medical condition or become permanently disabled as a result of injury or illness. The insurance helps cover the cost of medical treatment and replace lost earnings,” the report noted.

Zurich’s Oliver added that life insurance should be a fundamental part of a person’s financial plan as it provides a monetary lifeline that protects the family from financial distress following the death of the main breadwinner.

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