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| Spencer Lodge |
Spencer Lodge MD Fund Advisers Dubai, Fund Advisers the Dubai-based personal
finance planners, surveyed 300 of its clients this year and the results
demonstrated a shockingly serious problem here in Dubai.Of all the respondents living in rented accommodation in Dubai, 81% have no contents insurance. Even though the UAE
enjoys a low crime rate, your possessions can still be stolen. It also
leaves a lack of cover if householders experience a fire or burst pipe.
If you live in a compound or tower and are deemed responsible for a fire
or flood,you could be responsible for damages caused to others'
properties and possessions, in addition to your own.
Furthermore, the UK's daily newspaper The Telegraph found that, when insuring their contents, people often valued their clothes and valuables on worth at the point of valuation and not what they would be worth if bought new. The Telegraph also found that the most common items that are missed when insuring homes are often the most obvious, such as carpets, furniture, pre-paid rent and security bonds.
But, as Fund Advisers' survey showed, the under-insured parties of Dubai don't stop there. Over 90% of clients surveyed do not hold sufficient life cover. This not only gives a dangerous false sense of security but also leads to a gross over-estimation of the capabilities of the life insurance already in place.
Fund Advisers found that, relative to the number of dependents and when insuring their life, parties can be heavily under-insured. If you earn £50,000 a year but only insure your life for £100,000 and the worst happens, your family will only have two years of cover.Correctly valued life insurance should pay out a lump sum in order to generate sufficient annual interest for your next of kin to live off, without depleting the lump sum value.
Do you know anyone who has had cancer, a heart attack or a stroke? What would happen to you if you were diagnosed with cancer?
The survey also found that 72% of clients surveyed had life cover but no critical illness cover or income protection. 1 in 3 people will get cancer in their lifetime. If this happens to you or your partner, how would you afford your rent or mortgage payments? Some respondents were covered by life insurance policies that were attached to joint mortgages, which meant that their property would only be paid up on the death of the second partner and not the first - i.e. the insurance would not pay out until you both died.
Spencer Lodge, MD, Fund Advisers, has said that many people think they can't afford life insurance or critical illness cover. However, he correctly points out that, "The consequences are so catastrophic if anything happens and you aren't covered, how can you afford not to have it? You are five times more likely to suffer a critical illness before you reach 65 than die. Here in the UAE you are entitled to 45 days paid sick leave, what happens to you and your family after that short time?"
Another concerning fact that Fund Advisers discovered was the chronic lack of pension cover. The UK alone has12 million elderly citizens, which is a fifth of its population. In 1981 the UK's Queen Elizabeth II sent out 2,600 telegraphs to people on their 100th birthday, in 2011 she sent 12,000 - quadruple the amount. There are now more pensioners than under-16s and by 2083 this ratio is expected to reach an astounding 3:1.With such dramatic demographic indicators you would expect savings for pensions to be at its historically highest. It is not. The UK spends just a paltry 5% of the GDP on pensions. In the US, 1 in 6 pensioners live below the poverty line and 40% of baby boomers are now so short of cash that they are planning to work until they die. With nursing homes costing upwards of £25,000 per year it's easy to see why.
Spencer Lodge says"I cannot stress how important this problem has become but, it is easily overcome. We've devised a simple method of calculation to help everyone to work out what cover they actually need"
Furthermore, the UK's daily newspaper The Telegraph found that, when insuring their contents, people often valued their clothes and valuables on worth at the point of valuation and not what they would be worth if bought new. The Telegraph also found that the most common items that are missed when insuring homes are often the most obvious, such as carpets, furniture, pre-paid rent and security bonds.
But, as Fund Advisers' survey showed, the under-insured parties of Dubai don't stop there. Over 90% of clients surveyed do not hold sufficient life cover. This not only gives a dangerous false sense of security but also leads to a gross over-estimation of the capabilities of the life insurance already in place.
Fund Advisers found that, relative to the number of dependents and when insuring their life, parties can be heavily under-insured. If you earn £50,000 a year but only insure your life for £100,000 and the worst happens, your family will only have two years of cover.Correctly valued life insurance should pay out a lump sum in order to generate sufficient annual interest for your next of kin to live off, without depleting the lump sum value.
Do you know anyone who has had cancer, a heart attack or a stroke? What would happen to you if you were diagnosed with cancer?
The survey also found that 72% of clients surveyed had life cover but no critical illness cover or income protection. 1 in 3 people will get cancer in their lifetime. If this happens to you or your partner, how would you afford your rent or mortgage payments? Some respondents were covered by life insurance policies that were attached to joint mortgages, which meant that their property would only be paid up on the death of the second partner and not the first - i.e. the insurance would not pay out until you both died.
Spencer Lodge, MD, Fund Advisers, has said that many people think they can't afford life insurance or critical illness cover. However, he correctly points out that, "The consequences are so catastrophic if anything happens and you aren't covered, how can you afford not to have it? You are five times more likely to suffer a critical illness before you reach 65 than die. Here in the UAE you are entitled to 45 days paid sick leave, what happens to you and your family after that short time?"
Another concerning fact that Fund Advisers discovered was the chronic lack of pension cover. The UK alone has12 million elderly citizens, which is a fifth of its population. In 1981 the UK's Queen Elizabeth II sent out 2,600 telegraphs to people on their 100th birthday, in 2011 she sent 12,000 - quadruple the amount. There are now more pensioners than under-16s and by 2083 this ratio is expected to reach an astounding 3:1.With such dramatic demographic indicators you would expect savings for pensions to be at its historically highest. It is not. The UK spends just a paltry 5% of the GDP on pensions. In the US, 1 in 6 pensioners live below the poverty line and 40% of baby boomers are now so short of cash that they are planning to work until they die. With nursing homes costing upwards of £25,000 per year it's easy to see why.
Spencer Lodge says"I cannot stress how important this problem has become but, it is easily overcome. We've devised a simple method of calculation to help everyone to work out what cover they actually need"
Using its own straightforward means of calculating the right amount of insurance or pension needed, Fund Advisers can make sure you are not undervaluing when taking out insurances or planning for a pension. With a basic principle called K+I+D, Fund Advisers can take into consideration, the three main areas of outgoing that need to be covered: K - Kids; I - Income; D - Debts.
This is a sure-fire way of calculating how much insurance you require. How much will a child cost in years to come? How much insurance is necessary to cover income indefinitely? And, what debts are outstanding, such as car loans, mortgages and credit cards? All these major financial needs need adequate cover in the form of life cover, income protection and critical illness cover. And they require addressing before the unexpected death of a party;especially since inflation will halve the worth of your savings approximately every 22 years.
