We are all susceptible to key biases, the most prevalent when it comes to life insurance, is overconfidence. We think misfortune won’t come knocking on our door because the rules don’t apply to us, so we make bad financial decisions and then suffer the consequences. Our 2019 customer benefits paid report, shows that a more balanced approach to planning for positive and indeed negative life events is a more sensible course of action.
The benefits of life insurance, actually any form of insurance, cannot be understated. From car damage to critical illness, there are insurance options to protect you against most of life’s unforeseen events. So, unless you rank among the ultra-wealthy with enough cash to cover your rainy days, you need insurance!
However, there are still some NRI’s without insurance of any kind. In my line of work, I often see people rationalise not having insurance cover and there are three excuses that I hear time and again.
“My pay is not enough as it is!”
Insurance requires you to set aside a certain amount of money regularly. However, with the prices of well, everything, rising in recent years and certainly rising faster than our salaries, those without insurance argue that they are already paying more than they can afford. What these individuals don’t realise however, is without insurance, the financial impact is multiplied many times over –particularly in Dubai, where the cost of living is high.
In the case of life insurance, those paying the premiums often don’t get to see the benefits. Putting limited and hard-earned money towards something that you will never personally benefit from is therefore difficult to stomach. But, it’s important to ask yourself, if money is tight now, how would my family cope if something happens to me? You should know that the right insurance policy should be affordable, and it will cover you for any emergencies.
“I work out and I have a balanced diet. I don’t need critical illness or life insurance’’
It is easy to brush aside health concerns when we dismiss critical illness as a thing of old age, as we NRIs tend to do. After all, if nothing is amiss on the health front, why bother?
While we may know intellectually that death is a 100% certainty for every single one of us, it’s really difficult to wrap our minds around the idea that we might not be here one day. We prefer to think of ourselves as invincible, even as we age.
The reality however is startling – our insights show that the average age of a critical illness claimant is 48 years.
“It’s already too late — what’s the point?”
Some NRI’s are totally on board with the benefits of insurance, but feel that taking out a policy halfway through their forties is too late in life. What they don’t realise is that for critical illness in particular, premiums will rise with age regardless of when the policy commenced.
Our 2019 claims insights – why we choose to lead the way
Our 2019 Zurich Middle East paid customer benefits report helps put to bed, the rhetoric around the value of taking out insurance policies; ‘’If I eat healthy and exercise frequently, I won’t die young” or “Now that I’ve reduced smoking to under a pack a month, the chances of getting lung cancer are minimal.” Our life checker game reveals the common myths around life cover and the key misguided reasons people don’t take out life insurance.
Our data reveals the relatively short life expectancy of those living in the Middle East and the striking prevalence of critical illness in the region. This is further supported by insights from Gulf News showing that on average Indians die 10 years earlier of heart disease than others. We believe that by publishing and being totally transparent with the claims we pay, customers and the broader community can be empowered to take control of their future.
Clearly, the decision to buy life insurance is something that most NRI’s need to be prompted into. Often times, the nudge will be a natural life event — we’ll experience a death in the family or of a friend. We’ll have a baby or start taking on the care of an aging parent, and it will suddenly become crystal clear just how much is riding on our shoulders. I hope however, that the work we do through this article and others like it provide another kind of nudge, one that prompts individuals to delve deeper, be more informed and take the right kind of action.