People in the UAE are among the least likely globally from a total of 12 countries to take a proactive approach towards ensuring they and their families are financially protected in the event of disability, critical illness or death, according to a new report.
HSBC’s Power of Protection 2016 report said 65 percent of people in the country believe it is someone else’s responsibility to provide financial stability to their families if something were to happen to them and they were no longer able to earn.
Similarly, around one in three (32 percent), the highest globally, said they have not taken out life insurance because they expect someone else to arrange it.
In its first year, the new global research from HSBC looks to provide insights into people’s concerns about the future and how they are financially protecting themselves and those closest to them.
The report assesses the views of over 11,000 people in 12 countries, and over 1,000 respondents in the UAE. It revealed that tied in with the need for people to take more responsibility towards protecting their families’ futures, residents in the UAE lacked the awareness and understanding about the importance of investing in insurance.
People in the US are most likely to take responsibility for themselves (54 percent) while those in China (77 percent), the UAE (71 percent) and Argentina (70 percent) are the most likely to say someone else - state, employer or family - should be responsible.
Of the 65 percent of people in the UAE who believe that someone else should take responsibility for ensuring their family’s financial stability in the event of an incident, under a third (30 percent) said that it should be their family, almost a fifth (19 percent) said that it should be their employer and 16 percent believed that it should be the government.
Gifford Nakajima, head of Wealth Development, UAE and MENA, Retail Banking and Wealth Management, HSBC Bank Middle East Limited said: “While most people in the UAE (67 percent) have an optimistic outlook and high expectations for their future quality of life, more than half (56 percent) say that their biggest worry is that poor health could one day stop them being able to look after themselves or their families.
"Despite recognising this challenge, we see that 30 percent rely on family, 19 percent on their employer and 16 percent on the government for financial support, the latter of which is not possible for expats in the UAE, highlighting the need for people to take ownership of securing protection for their families.”
The report said that beyond the lack of awareness, another major barrier to taking out insurance appears to be cost-related as six in ten expect or know that it is too expensive.
Life insurance penetration rates in the UAE were less than 1 percent in 2014, according to Timetric research, far behind other developed Asian economies such as Taiwan (15.3 percent) and South Korea (9.2 percent).For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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