Insurance is a great fail-safe in case life throws you into a very unfortunate situation where you need to spend a huge amount of money to solve it. There are multiple types of insurance, each applying to specific scenarios and aspects of our lives.
Here is a short guide on the different kinds of insurance in the UAE, and why it would be best to get them!
1. Health Insurance
Medical fees are expensive. What happens if you would need to undergo serious surgery?
Health insurance can cover most expected and unexpected medical expenses, such as routine visits, medications, emergencies, and surgeries. Having one ready at any time of your life can help you pay for all or at least a portion of your hospital bills.
But how does this work? Basically, every month you get to pay a specific amount to an insurance provider, which is generally referred to as the “premium”.
In the event that you need hospitalization or medical care, the insurer will use the premium to help you pay for your bills. The coverage and agreed amount will differ for each insurer, depending on your contract.
2. Car Insurance
This particular type of insurance is obviously for drivers and car owners.
In case of an accident, collision, general theft, vandalism, or even acts of nature (such as floods, fires, and storms), having car insurance can help you replace your vehicle or at reimburse a specified amount of money to help you pay for repairs.
There are auto insurances that can cover cars, motorcycles, trucks, and other types of vehicles. On the other hand, some companies offer a specific type of insurance for personal cars.
Regardless, this type of insurance is intended to protect the owner and the car from losing money due to repairs or have a car replaced.
3. Life Insurance
A life insurance covers… well, quite the opposite of its namesake, really. It’s concerned with what happens after someone’s passing.
Life insurance policies are meant to provide the deceased’s surviving spouse and dependents money. This can help them get on their feet, especially after the death of the breadwinner of their household.
This money is usually agreed upon by the deceased and the insurance company they hired to fulfill the said policy. Depending on the company, beneficiaries can choose how to receive the death benefit from the insurance.
The first payout option is called a lump-sum fixed amount. This is where the dependents will receive the entire money in one payment.
The second method is called the specific income payout. For this process, the beneficiaries can opt to get monthly installments over a period of time.
A retained asset account method can be chosen if the dependents would want to have the money from the insurance be placed in an interest-bearing account. The beneficiaries will be given a checkbook to access the cash.
Lastly, the recipients of the benefit can opt for an annuity or a life income payout. This is where the insurance company will provide payments as long as the beneficiaries are alive.
Overall, this is a type of plan that’s usually made for other people and not for the actual owner or applicant themselves.
4. Travel Insurance
This policy can cover leisurely escapades and work-necessary travels on any part of the globe.
Travel insurance is commonly taken by people to cover unfortunate occurrences such as trip cancellations, misplaced luggage, accidents, medical expenses on a trip, or even lost documents.
Usually, this is recommended for people who are traveling beyond their home country for the first time, as they are the most likely to make mistakes during their journey.
But there’s no harm in being safe while having fun, right?
5. Home Insurance
Home insurance focuses on offering financial protection should anything happen to your home. For example, in case of theft, fire, wind damage, and other unfortunate incidents, having a policy on hand can help you recover or rebuild your home.
This kind of insurance can also cover any costs that you will have to pay in case someone gets injured in your home or if you damage somebody else’s house. The specifics and scope of a policy will depend on the insurance provider.
There are many varying forms of this home-related guarantee.
One of the types of home insurance is called a comprehensive form. Being the most common policy being availed, this form covers your home and your belongings from all loss.
Another form of home insurance is called the broad form. This is where a company can provide protection on the structure itself, and offer some of your belongings (or not at all).
The last type of this kind of insurance, called the basic form, is the simplest coverage offered. People who would avail of this type can expect only certain items in their home to be covered by this insurance.
The basic form is the cheapest to avail, while the comprehensive form is the most expensive of the three.