Why wills and medical care are essential

Last month I covered how to manage debt, and hopefully you will have put some of the basic tools into place to manage your income each month. Following on from managing your money, wills and medical are essential items to have in the Middle East.

Starting with wills, let’s start with the basics. What is a will? Simply put, a will is a document that is legally recognised as your written instructions as to what you wish to happen with your estate in the event of your death. Sounds simple doesn’t it? And in most cases it is. The difficulty arises when there is not a will. When this occurs, there are no instructions as to what you wanted to happen to your estate, and so most governments have set out rules that are to be followed. And this is where the problems can occur, as these rules may not be what you want to do with your estate, but as you are not able to argue the case, they will be followed. And more importantly than assets, if you have children who do you want to look after them? Again unless you have documented this, how can your wishes be followed?

I appreciate that this can be a difficult subject to discuss, and none of us want to think about our own mortality, but if we don’t the alternative is potentially much worse, with no instructions in place, and a far more slow and difficult process that our loved ones will have to endure. In summary, a will is an invaluable document that we all should have in place and then should be reviewed regularly.

Medical insurance is also an important product to have in place. The UAE boasts some of the best healthcare in the world, but this can come at a premium. Options range from a basic one country, in-patient only cover to a fully comprehensive, international plan that covers most eventualities. Even if your cover does not offer as comprehensive cover as some people may have enjoyed back in their home countries, it is an important safety net to have in place. Like all insurance we all hope that we never have to use it. However, statistically at some point there is a chance that we will need to make a claim. The claim may only be for a minor issue like a cough or cold, or it could be due to a life threatening illness or accident.

Interestingly, the majority of queries that I receive relate to what I would call relatively minor issues – that is to say claims relating to smaller claims for some medications or treatments. While I appreciate that these can be serious issues, and it is annoying if not all of a claim is covered, equally the cost is generally relatively low in comparison to inpatient treatment, and it can have a huge impact on the cost of your cover. An analogy that is often used is in relation to car insurance – if you knew that you were going to have an accident would the insurer cover you? Probably not, or they would charge a huge premium, and the same is true of medical insurance.

As with most aspects of financial planning, the right plan will depend on your personal circumstances, and your financial advisor can talk through with you to establish your needs and help you plan correctly. I hope this has given you a brief summary of why you should have a will, and also why medical insurance is so important. Next month I will look at emergency funds and cash reserves.

The writer is the regional head of Acuma--Independent Financial Advice. Opinion expressed here are his own and do not reflect that of Gulf News.