Thursday, 12 March 2015

Guide to health insurance

How does health insurance work?

In most cases, companies provide health insurance to their employees. Different insurance companies will have varying policies on matters such as which hospitals you can be treated at, how much of the medical cost the policy covers and whether they accept direct billing (the insurer pays the medical provider directly, rather than you paying and you insurer reimbursing you). However, not all companies provide health insurance or, if they do, the cover may not extend to spouses and/ or children.
There are many health insurance providers but it is critical to compare and search for the right insurance policy for you and your family.
[Compare health insurance in the UAE | Compare health insurance in Saudi Arabia]

So what are the things you should consider in a health insurance?

1. List of hospitals covered

Depending on the type of cover you go for, each provider has a specific list of hospitals and clinic that they cover. Generally if you take a ‘local’ cover (geography-wise), the insurance policy will only cover certain list of hospitals, which do not always include the premium private hospitals. A regional plan, on the other hand, will cover all hospitals and clinics. Make sure you have the provider send you the list of which they cover before you sign up. You may like to pay more for international cover – covering medical care in the USA is the most expensive option; Europe, the UK and Canada can be included at a premium but still tend to cost less than US coverage.

2. Deductible

Health insurance providers will give you options of different cost deductibles, and your policy will vary accordingly. A deductible is the amount of the total medical bill that you have to pay – the insurance provider will cover the rest.

3. Maximum claim amount

Not something you normally think to check, but it is important to plan for the future when taking a health insurance policy. Therefore ensure that the maximum claim amount that the insurance provider is offering you covers what you would think you may end up needing. In the worst-case scenario where you use up the full amount, you will need to continue paying out of your own pocket.

4. Pre-existing conditions

When taking out a new policy, your health insurance provider will ask you to disclose any pre-existing conditions. If you do have any, there is a high probability you will be asked to undergo medical check-ups before the provider approves you and you may pay a higher price for cover. Most insurance providers do not cover any pre-existing conditions for the first nine to 12 months and, after that, they will set a cap on cover. Be sure to mention any pre-existing conditions when asking for a quote, to ensure they will be covered and that you do not risk coverage for your pre-existing condition being disqualified or your insurance later being canceled altogether.

5. Maternity/ pregnancy cover

It is important to plan ahead, as most health insurance providers will only cover maternity-related health issues nine to 12 months after the start of the policy. Before planning a child, you will want to ensure you have health insurance coverage in place.
[Related: Maternity cover: Questions to ask | How much is your baby costing you?]

6. Ambulance cover

Calling out an ambulance is not always covered – check when you’re getting quotes.

7. Dental care, alternate medicines, optician, eyeware

There are always additional elements to consider when taking a health insurance policy, such as dental care cover. If you wanted alternate medicine such as acupuncture or osteopathy, is that covered? Check when getting quotes.

8. Covering your maid

Don’t forget your maid needs health insurance too. You need to consider whether to go for basic cover or get your maid her own plan – it’s a massive saving in the long term if it means uninterrupted childcare. There are even some dedicated maid insurance polices.
[Related: Why it is wise to insure your maid in the UAE | Why it is wise to insure your maid in Saudi Arabia]

9. Senior health insurance

Getting senior health insurance for the over-50s – yourself or your parents – can be costly. Sixty-five is a common cut-off age and pre-existing medical conditions matter more than ever. Pick the right senior health insurance plan from the start: changing service providers later on will cost you more.It’s well worth shopping around and, if you have moved your parents here from overseas, it may be worth leaving them on an international plan – check the costs.
[Related: Senior health insurance]

10. Umrah and Hajj

Check whether your health insurance covers you for Umrah and Hajj, and check what vaccines you will need and whether those are covered too. If traveling from the UAE for Umrah, you may want to get travel insurance for your journey.

Buying a car in the UAE? Where to start

Go back to the basics

Buying a car isn’t as complicated as it may seem, especially if you have an idea of what you want and what to look for in a car while making a choice. Let’s start with the basics. First, you will need to answer these questions:

Why do you need a car? Determine what the most important aspects of a car are to you. Are you interested in practicality and comfort? Are you more interested in handling and performance? Does car design appeal to you more? What about car brand?
What details should you pay attention to in a car? Once you have decided what you want to get out of a car, it’s time to start looking at the relevant details.
What’s your budget? You have to be realistic with your financial capabilities as this should give you a hint about the car make and model that you will go after
Do you prefer new cars or would you consider buying a used car? Each has its pros and cos and your decision could affect your budget so think about it carefully.

[Compare car deals in the UAE and book a test drive]

Consider car features

Once you’ve addressed these key points, the experience of buying a car can get a whole lot simpler. The next step is to look at car features based on your needs:

Car type: When choosing a car many people tend to define its size and match that to how it can address their daily needs. For example, if you have a large family, you may consider a bigger car whereas if you plan to be the sole user of the vehicle, a smaller car may be a more appropriate choice and so on. Some of the different car types you can consider based on your needs include sedans, coupes, convertibles, wagons, Special Utility Vehicles (SUVs) or 4 X 4s, pickups and hatchbacks.
Safety
Performance
Handling
Options and special features such as comfort and space
Car design
Brand or car make

You may want the car that you choose to satisfy a number of the functions above. For example, you might decide that performance of a car and its design are equally important to you. Just remember to think about all of the features related to the aspects of the car you want when making your selection.

Where to buy your car

Having gone through the thought process of choosing a car, you now need to look for it in the market. And to do so here are the factors to bear in mind:

If it’s a new car head to the nearest dealership of the car brand you are interested in to book a test drive.
If it’s a used car you’re after, there are several resources available in the UAE including:
1. Second hand approved dealership departments: This can be a safer option as you will be buying from a company rather than from an individual and the process can involve less hassle to you. But be aware that car prices at second hand dealerships could be considerably higher compared to other used car outlets.
2. Online classifieds and local forums: You can find several options for the same car type and brand here
3. Classified magazines and newspaper listing
4. Your local car market: this includes Al Aweer Market in Dubai and Abu Shaghara Market in Sharjah)

Remember: If you are buying a used car, make sure that you inspect it thoroughly at independent service centers or car dealerships before making your purchase.
[Related: How to get the best deal on a secondhand car]

Financing and insuring your car

Next, you’ll need to decide how to finance the car. You could purchase it entirely in cash or you may choose to obtain a car loan or personal finance. If you decide to take out a car loan, make sure that you have a down payment prepared as you will be required to pay up a minimum of 20% of the car’s value with the bank financing the rest. Just bear in mind that if you decide to resell your car before the end of your car loan tenor, you will be required to pay off the loan in full. This is because your car will be mortgaged to the bank and you will only be able to transfer the ownership of the vehicle to the buyer once the car has been released from the bank.
[Compare car loans in the UAE]
[Related: Got a loan on you car? How to sell it | Buying a car: Cash or loan?]
Personal loans are another option to finance your car. But something to bear in mind is that interest rates on personal loans can be considerably higher than those on car loans. Compare the various finance options and decide which one is best for you based on your financial situation.
[Compare personal loans in the UAE]
Once you have obtained the necessary funding, you’ll need to insure your car. Some of the factors that could impact the price of your insurance quote are your age and how long you have been driving as well as the value and year of your car’s manufacture. For a full list of the car insurance policy covers you can get in the UAE, read our guide to car insurance.

0 Labels: car loan, loans, Personal loans

Personal loans vs Loan on Credit Card

Have you ever thought about taking out a loan on your credit card but were unsure how this differs to a personal loan? We take a look at situations in which a loan on a card could be the appropriate option for you and delve into the details of this product to help simplify your decision.

Applying for a personal loan can require more time and paperwork

The process of applying for a personal loan in the UAE can sometimes be daunting. When all of the paperwork is done and dusted, you then find yourself pretty much committed for the long haul and bound to make monthly payments of a fixed amount. The terms and rules can often be inflexible and overpaying could result in penalty charges.
[Related: Need an extension on your loan? Here’s how | Remember the full cost of a personal loan – not just the rate]

Loan-on-card can be a good option for quicker financing

The lengthy process involved in obtaining a personal loan is one of main reasons why some bank customers opt to take a loan on card (LOC). It’s a lot less paperwork as the customer is generally preapproved by the bank in the first place. Also, it’s an ideal option if you are looking for immediate funds that you would be able to pay back in the short term (at a lower interest rate than a typical credit card). Additionally, depending on your issuing bank, you may be able to get a lower arrangement fee on a LOC as compared to that typically charged on a personal loan.
Be ware though, that interest rates on LOC are typically far higher than those on personal loans. So although LOC can be easier and quicker to obtain, it does come at a much higher cost to the customer.
[Compare personal loans in the UAE]

How do I qualify for a loan-on-card?

To be eligible for a LOC, the customer must demonstrate a good credit history with the bank. As with any loan, the requirements can vary according to the loan amount and interest rate on offer. This bank may typically require that you do not already have outstanding debts or loans that need to be paid off.
It’s important to note that the above mentioned details are only general guidelines. Each bank will have their own underwriting criteria, terms, conditions and varying interest rates, so it would be wise to shop around before deciding on a line of credit.
[Related: How can you save on comparing credit cards? #CompareToSave]

Should I apply for a LOC?

For those who are unable to qualify for a personal loan, the LOC could be the next best option, provided that they are able to re-pay the amount within a shorter time frame. Just make sure you don’t bite off more that you can chew “If a bank is declining to lend, I would have to question whether the (customer) would be wise to borrow at all,” says Keren Bobker, Senior Associate at Holborne Assets – a company that provides financial advice to individuals. “I have seen adverts for non-bank loans but people should be wary of less regulated borrowing that will usually be at very high interest rates.”

0 Labels: car loan, credit card loan, loans, Personal loans

Why shopping around for a car loan pays off

Fancy a new or secondhand motor? Then be savvy about how you finance it, because this is a big purchase and the car loan you decide on now will determine how much you pay for months or years to come.
To put it simply, if you want a AED 100,000 car and you take out a three-year car loan of AED 80,000 at a flat rate of 2.99 percent, you will pay AED 2,422 a month, with total interest of AED 7,176.
Take the same car loan at a rate of 4.5 percent and it will set you back AED 2,522. That may only be AED 100 or so more a month, but over three years it’s an extra AED 3,624! Now that’s something to think about.

Loans and downpayments

But it’s not as simple as going for the cheapest rate. The cheapest rate may require a minimum salary that you can’t meet, or demand you transfer your salary to the bank offering the car loan. For example HSBC currently has an offer of a flat rate 2.49 percent for a new car loan; however you must transfer your salary to them and have a minimum salary of AED 7,500 a month.
The other thing to consider is whether or not you have the funds to pay for the deposit. Under UAE Central Bank rules, anyone buying a car must put down 20 percent of the value of the car. This means that, if you’re buying a car for AED 100,000, you need a deposit of AED 20,000 – another reason to get the best car loan deal in place.
However, there is the option of a lease agreement which requires zero percent downpayment; for example, ADIB currently has a Car Ijarah product needing zero percent downpayment – which can be a plus if you don’t have the immediate funds for downpayment.

Fees, rates and homework

Some loans may also charge an arrangement fee – typically one percent – while others do not, or have a fixed fee of AED 500. Car loans with lower rates may also come with fixed repayment periods, which may cost you more than a loan with a higher rate that you can pay back over a shorter period.
And make sure that, when you compare car loans in the UAE, you consider whether they are at a flat or reducing rate, as comparing reducing rates with flat rates can be extremely misleading. We always list both rates, one being an estimate and one the actual quoted rate by the bank. [Read more: The difference between reducing and flat rates]
Put simply, you must do your homework and compare different car loans in the UAE before you make your choice. Add up all the costs incurred by taking the loan – not only the rate but the arrangement fee, minimum salary, early settlement fee etc.

Steps to buying

But let’s backtrack a little here…

The first thing you should do is decide what your budget is – that means how much you can realistically afford from your monthly budget.
Step two is picking a car to fit that budget
Step three is finding the finance deal.

Don’t forget, some banks only lend to reputable companies, so you may be asked to stump up a higher deposit – as much as a third of the value of the car – if they are unfamiliar with your employer.
And remember, when you walk into your nearest dealership to choose a car, you will be directed to a row of desks where busy salesman are waiting to market their finance deal. Don’t be distracted by the shiny new motor in front of you and then agree to sign on the dotted line with the first dealer in the line.
Make sure you do your homework to ensure you have indeed secured the best car loan and that it fits within your budget. It may delay you getting your hands on your dream car, but you will be grateful in the long run.

0 Labels: car loan, loans, Personal loans

Guide to car loans

Take your time choosing a car loan and do your research – it’s a big purchase and the car loan you decide on will determine how much you pay for months or years to come. And it’s not as simple as just picking the cheapest rate – which may mean transferring your salary to that bank or earning a certain minimum salary. [Related: Why shopping around for a car loan pays off]
Firstly, decide how much you want to borrow for your car and the length of the loan period before you begin your search. Then remember to watch out fees, such as early settlement and upfront fees – both typically one percent – and note you will get a better profit rate and loan amount if your salary transfers into the bank.
[Compare Car Finance in the UAE | Compare Car Finance in Saudi Arabia]
Finally, look out for any added extras such as free car insurance with the loan, extended warranties or free traffic registration.

What should you know when comparing car loans?

1. New or used

Once you decide whether you are buying a brand-new car from the showroom or a secondhand car, you probably will need to finance the car. You can filter your search results on Souqalmal.com to only look for financing for new or secondhand vehicles.
[Related: Should I buy new or secondhand? | Buying a new car in Dubai]

2. Down payment

Make sure you can afford the down payment, it’s a requirement by law and varies based on these factors:

Are you buying new or used?
Are you going to transfer your salary to the bank that will be providing you the car loan? (i.e will your salary be deposited from your employer to the bank in question?)
Is it an Islamic product? An Ijarah, which is an Islamic car finance product does not require any downpayment to be made as it is considered as a lease to you and transferred to your ownership at the end of the term.

3. Minimum salary requirement

There is always a minimum salary criteria set by banks on new or used car loans – make sure you meet the requirement for any loan you’re interested in.

4. Arrangement fee

Arrangement fees or upfront fees are what a bank would typically charge you at the beginning of the loan as a processing cost – that is, after you have accepted the car loan. You will have the option to roll the fee into your principal car loan amount or pay it upfront.

5. Early settlement fee

If you take a car loan for five years and then decide to pay if off earlier, most banks will charge a fee to settle the loan, typically around one percent or more. Sometimes, they have offers for no early settlement fees – but check carefully whether this is applicable for cases where you refinance with another bank as well as if you settle the loan fully in cash.

6. Flat vs reducing rates

There are two ways of calculation of the rate on the car loans that you see advertised by providers – as a reducing rate or as a flat rate – so make sure you ask the bank what type of rate is being quoted. A reducing rate means it is the percentage you pay on your outstanding balance of your car loan whereas a flat is the percentage of you pay on the principal amount of your car loan throughout the term. So a loan at a reducing rate of eight percent is exactly the same as a loan at a flat rate of 4.41 percent (the general rule is you divide reducing by 1.813 to get the equivalent flat rate). So be careful when you compare rates, as one bank may be advertising a reducing rate loan and the other a flat rate loan. If you want more details about how these are calculated, you can read our guide to reducing vs flat rate.

7. Salary transfer

While transferring your salary to a bank to get a car loan is not necessary for all loans,it might mean you get a better rate. The bank will consider a customer with a salary transfer less risky and therefore will generally offer them a lower rate.

8. Islamic or conventional?

If you are looking to finance your car with an Islamic product, you need to search for only products that are sharia-compliant. Make sure you ask your bank whether they offer Islamic financing.
You may not even be sure if you definitely want a car loan or car finance. If so it’s worth reading Buying a car: Cash or loan?
Many people have Islamic car finance without realizing it – but what is the difference between Islamic and conventional vehicle finance and how does that affect the consumer? Find out in our guide to Islamic car finance.
Like all loans, make sure you do your homework and compare all the Islamic car finance available.

9. Self-employed

In the UAE the self-employed – including professionals such as doctors – can find it harder to get a car loan as they do not have a fixed income per month. There are still car loans available for the self-employed but they may have higher rates or lower ceiling limits or tenures so do shop around.

2 Labels: car loan, loans, Personal loans