Residents of the UAE are willing to spend more on Critical Illness Benefit insurance cover than the global average, but remain significantly under-insured, according to a new report by Zurich International Life, Middle East Individuals are willing to pay an average of 6% of their monthly income on Insurance premiums, compared to a global average of 5%, the Life Company said in a recent report. One in five individuals in the UAE is willing to commit a 10% of their monthly income, it added. Yet, the market remains under-insured as Zurich said it found that 76% of UAE residents are under-insured with 85% of women not covered for Critical Illness Benefit.
The perceived high cost of insurance is one of the main reasons for low uptake of such insurance, which suggests that many may be over-estimating the cost.
Four times annual income
It is said that people usually need around four times their annual income as cover. This will ensure that you can afford to maintain your current lifestyle while you are out of work and recovering. It’s important to note recovery from a Critical Illness is highly individual and it could possibly take longer than four years for you to fully recover.
As well as living expenses, there is a lack of knowledge of the hidden costs when being diagnosed with a serious or critical illness. In particular, individuals underestimate the potential reduction in their income: they may have to reduce their working hours, or stop working altogether.
There may also be hidden healthcare costs: 41% of people living with a critical illness incur costs for other healthcare needs, including prescription medicines, clinical psychological services, physiotherapy, speech and language therapy, occupational therapy and dietetics. Another problem is that most people do not consider themselves at risk: 97% believe they are healthy today. The reality can be different: The average age of Zurich’s critical illness claimant is 48, with Zurich’s youngest (adult) claimant for critical illness being only 29.
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