UAE: Residents willing to pay more for critical illness protection
Source: Middle East Insurance Review | Mar 2017
UAE residents are willing to pay an average of 6% of their monthly income on insurance premiums against the 5% global average. One in five individuals in the UAE is willing to pay 10% on the same, according a report by Zurich International Life, Middle East.
Despite these findings, the report found a disparity between the willingness to spend to protect oneself versus the current level of protection in the UAE. About 76% of UAE residents are underinsured and 85% of women are not covered for critical illness.
One of the main reasons for the low level of protection in the UAE is the perceived high cost. However, the amount people are willing to pay is higher than the average cost of insurance for most of them.
Mr Jason Waldron, protection expert at Zurich International Life, said: “To determine how much critical illness cover you need, Zurich recommends, as an absolute minimum, taking your annual income and multiplying this by four. This will ensure that you can afford to maintain your current lifestyle while you are out of work and recovering.”
The report highlights a lack of knowledge of the hidden costs when being diagnosed with a critical illness.
Critical illness cover is commonly confused with private medical insurance (PMI). While PMI might cover some or all medical bills, there tends to be an annual limit, and individuals might also be required to co-pay a percentage of the bills.
Interestingly, a large marjority do not consider themselves at risk. In fact, 97% consider themselves healthy today. Zurich claims data shows a different reality as Mr Waldron explains: “The average age of Zurich’s critical illness claimant is 48, with Zurich’s youngest (adult) claimant for critical illness being only 29. Unfortunately, critical illness can strike anyone at any age, at any time. Our youngest (child) critical illness claim came from a four year old. Zurich offers free critical illness cover to children (age 1-18) when an adult critical illness policy is purchased.”