Life Insurance

By Paul Halfyear

SOMETHING WE ALL NEED?

What is it? | Why do I need it? | How much cover should I have? | Why would a business want it? | Can I just get cover at home? | Who should I talk to?

What is it?

Life assurance in its simplest form is a contract known as an “Insurance Policy” that will pay out a sum assured on the death of the person or persons covered by it. Life assurance can be in place for a set number of years, which is called the term, or whole of life. The sum assured is usually a lump sum, but it can be arranged to pay out a regular amount each year to effectively replace an income.

It is also possible for a person, at an additional cost, to protect themselves against “Critical Illnesses” such as forms of cancer, heart attack, or strokes for example. Accident cover can also be purchased to cover the accidental loss for example, of a limb.

Why do I need it?

The need for life assurance varies with different people. A single person with no dependants will have little or no need for life cover, though they may wish to leave money to someone or ensure as far as possible they are not a burden to others in the event of something unforseen happening to them.

A couple with a mortgage or other debts will usually want to ensure that their mortgage is paid off along with other debts if one partner dies. A couple with children will want to ensure that their property is secure and there is also enough money to ensure that the surviving partner and children can continue to live to a good standard and if necessary ensure that the children can continue their education to university level at least.

For businesses there is also a need to protect business partners, directors and key employees to ensure a business can continue to operate.

How much cover should I have?

This really depends on your circumstances. As a start, for an ex-pat living in Qatar you could be looking at costs in excess of USD 20,000 in the event of a death to get all the permits and the deceased back home for a funeral. This would even apply to a single person if they or their family want their funeral to be held at home.

The next thing that needs to be taken into account is debt. If your death would leave problems for someone then you should cover the debt and under debt would be included mortgage, loans and credit card payments. For those with families the next consideration is ensuring that the family can continue to pay bills and enjoy a good quality of life. To consider how much would be needed for your particular circumstances it is wise to speak to a financial adviser who would help you with this.

Why would a business want it?

There are many reasons, from ensuring that the death of a director or partner doesn't change the ownership of the business. For example if a partner in a business should die there would be enough money available from an insurance policy to purchase the partner's share of the business from their inheritor. Another example could be the death of a key employee in the business and ensuring that enough funds are available to recruit a replacement or cushion loss of profits. Life insurance can also be provided as an additional motivational employee benefit which is seen by many as a great benefit to have!

How much would cover cost?

This depends on many things such as the age and sex of the person(s) being covered by the insurance policy, the type of policy, the term of the policy chosen, the amount being insured, past health problems and participation in “dangerous” activities such as motor racing and scuba diving. Again a Financial Adviser will be well equipped to discuss all this with you.

Can I just get cover at home?

You may be able to get and may already have cover at home. However you should be aware that many policies do not cover you if you are living or working in the Middle East. If you have any existing insurance cover you should check with your insurance company that they will continue to cover you while you are living outside your home country. You would again benefit from reviewing this with a Financial Adviser to ensure that your loved ones do not have any problems should you unfortunately die, something none of us like to think about!

Who should I talk to?

Speak to an independent financial adviser to ensure that your individual requirements are catered for. A no obligation meeting can provide advice and guidance as to what best suits your needs.

It is always wise to ensure that the Financial Adviser that you meet is properly qualified and regulated by the relevant authority locally, which in Qatar is the Qatar Financial Centre Regulatory Authority (QFCRA). You can check the QFCRA register at www.qfcra.com.

Article written by Paul Halfyear of Nexus Financial Services WLL who are authorised by the Qatar Financial Centre Regulatory Authority in Qatar, number 00099. Paul can be contacted on +974 368 1240 or for UK residents via Skype on 0114 360 3036 and by email: paul.halfyear@nexusadvice.com .

Nexus Financial Services WLL, QFC Branch, Suite 501, 5th Floor, Al Reem Building, Unaiza Street, West Bay, Doha, Qatar. PO Box 23684. Tel: 4109840, Fax: 4109804

Disclaimer: The advice and opinions in this article are those of the author, and Nexus Financial Services solely, and are not endorsed or recommended by Qatar Visitor in any way. Qatar Visitor is not responsible for any reliance on advice given by Nexus Financial Services, or any other financial advisor, including any reliance on the above or any other article.