In many ways, 2020 has reminded us that there are few certainties in life. And as we have seen, those with paid-up insurance policies in place have generally fared better than those without.
Insurance offers a cushion of financial support by providing safety and security against specific events. Regardless of one’s current status, insurance can serve as a safety net when things go wrong. This article looks at the concept of insurance and explains the different types of insurance in the UAE, as well as which type is suitable for whom.
What is insurance?
At its most basic, insurance safeguards you from the risk of loss, damage, theft, or other uncertainties in the future by providing financial protection or reimbursement in return for a monthly or yearly fee. In effect, you transfer the risk of financial losses – or future outgoings – to an insurance company (or insurer) for a smaller fee. Health insurance can pay for sudden hospitalization, for example, while car coverage can reimburse you for the cost of an accident.
Insurance companies are able to pay out large sums of money because they pool many clients’ risks in order to make payments affordable.
The UAE has a well-developed insurance sector with a mix of local and international providers, which makes it home to the GCC’s largest insurance market.