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Dubai: If you are a working professional in the UAE, what happens to your gratuity in case you pass away before you retire or are eligible to avail of your gratuity? Also, if your employer has provided you with a life insurance coverage, is the insurance amount provided to your selected nominee, or – in the case of Muslim expatriates – is the life insurance amount distributed as per Shariah Law?

Gulf News spoke with Ruksana Ellahi, Senior Associate at Al Tamimi and Company, who said that the application of inheritance laws depends on whether the amount is considered as part of a person’s estate or not.

How is gratuity handed out to the surviving family members?

The end-of-service benefits and gratuity are like cash in your account and form part of a person’s estate. According to Ellahi, these funds cannot be released until a court order is obtained after a person’s death, on the distribution of his or her assets.

“End-of-service and gratuity payments form part of the person’s estate and therefore cannot be distributed by the employer until they have received the Succession Order or further instructions from the Court,” Ellahi said.

Ruksana Ellahi

Ruksana Ellahi

This also means that, in the case of Muslim expatriates, the gratuity would be subject to distribution of assets as per Shariah Law.

What happens to a person's life insurance after they pass away?

In the case of life insurance, however, the amount is not considered as part of a person’s estate.

“Therefore, when the person passes away, the insurance provider can pay out the policy proceeds directly to the beneficiaries detailed in the nomination form, upon the presentation of the person’s death certificate. No Court Order or Succession Order is required,” Ellahi said.

If your company applied for a life insurance policy at the time of recruitment, you would have been asked to state a nominee for the policy. However, if you do not remember providing a nominee, Ellahi advised readers to contact their human resources (HR) department and request further details on their life insurance policy.