People in the UAE are the least likely in the world to ensure they and their families are financially protected with life insurance, according to a new survey.
HSBC’s “Power of Protection 2016 – Confidence in the Future” report revealed 32% of people in the country – the highest globally – have not taken out life insurance because they expect somebody else to arrange it. Similarly, some 65% of people believe it is someone else’s responsibility to provide financial stability to their families if something were to happen to them and they were no longer able to earn.
In its first year, the new global research from HSBC aims to provide insights into people’s concerns about the future and their financial protection of themselves and loved ones. The views of more than 11,000 people from 12 countries were taken into consideration, including more than 1,000 respondents in the UAE. It revealed that tied in with the need for people to take more responsibility towards protecting their families’ futures, residents in the UAE lacked the awareness and understanding about the importance of investing in insurance.
Mr Gifford Nakajima, Head of Wealth Development, UAE and MENA, Retail Banking and Wealth Management for HSBC, said: “While most people in the UAE (67%) have an optimistic outlook and high expectations for their future quality of life, more than half (56%) say that their biggest worry is that poor health could one day stop them being able to look after themselves or their families.
“Despite recognising this challenge, we see that 30% rely on family, 19% on their employer and 16% on the government for financial support, the latter of which is not possible for expats in the UAE, highlighting the need for people to take ownership of securing protection for their families.”
The research also showed that 33% of people in the UAE say they could not manage well or at all if something unexpected were to happen to them, while 46% say they do not know how to get life insurance or are concerned about what policies would pay out.
Beyond the lack of awareness, another major barrier to taking out insurance appears to be cost-related as 60% expect or know that it is too expensive. However, on average, life insurance policies for individuals can start at US$1,500 annually – about $125 a month – and can vary based on factors such as age, cover and lifestyle.
Life insurance penetration rate in the UAE is less than 1%.