About nine in 10 UAE residents support a family member, however, only a fraction have life insurance or adequate coverage for critical illness, according to a global survey by HSBC.
The bank’s “The Power of Protection” study showed that 89% of UAE residents are supporting a child or parent financially; yet 79% do not have insurance to pay them a regular sum if a serious illness or an accident prevents them from working. Most of the respondents of the survey said those they support would not manage well if their assistance were significantly reduced, the survey revealed.
HSBC said only about 20% of UAE residents have life or disability cover that would pay out in the event of death or illness.
The low rate in the UAE is caused by a “significant lack of awareness of the cost of life insurance”, said Mr Gifford Nakajima, Regional Head of Wealth Development, Retail Banking and Wealth Management, HSBC, MENA.
In addition, only a fifth of those with dependents have a will in place, while 23% retain a legally appointed guardian.
The HSBC report attributed the lack of forward planning to a heightened sense of economic optimism. Nearly 80% of UAE respondents said they are managing well or very well.
When asked about risks that could put their financial security under pressure, respondents in the UAE said becoming unemployed (39%) as the biggest risk, followed by a sharp increase in the cost of living (36%), reduced income (33%), and economic downturn in their country (24%).
The “Power of Protection” is an independent consumer research study into global protection needs and trends, commissioned by HSBC. It represents the views of over 13,000 people in 13 countries, and over 1,000 respondents in the UAE.
The Emirates rank the second highest globally for people financing a family member (behind Indonesia). No other Middle East countries were surveyed by the bank. M