Expat Life Insurance - Everything you need to know and how we can save you a fortune!
make sure that you're getting what you pay for!
You may have just moved abroad or have been living overseas for many years now. You’ve probably given the life insurances policies that you have back home very little thought. The chances are you wrote to the life insurance company and informed them of your change of address. They sent you a reply to confirm that the change to your records has been made. Everything is good, you continue to pay your premiums and the insurance company takes them, but is it that simple?
Well as I am sure you’re guessing no it isn’t. When you took the policy out, the underwriter will consider all the risk factors that you face in that country. The premium is set to reflect these risk factors. When you move overseas these risk factors change as you may have exposure to different diseases or threats. This can result in a small or large shift in the chance of a claim being made on the policy. Therefore, domestic insurance companies don’t like to keep your policy going once you’ve relocated. Though they are still happy to take your premiums.
how to find out
The chances are that you still need life cover because you have debt (i.e. a mortgage) or dependents. Yet there is no point in paying premiums if a policy isn’t going to pay out. There’s an 80% chance that yours isn’t going to if you set it up in your home country.
So here is the thing that you need to do. Contact your insurer and ask specifically if the cover extends to your current country of residence without any restrictions. If the insurance company say you are still covered with or without restriction, then ask for written confirmation. Are these restrictions acceptable? If not, then set up a new policy. If they are, then continue with it (we came across someone who’s bank told them that cover would continue if premiums were paid from their current bank account).
Generally, at this point, most insurers will say that you aren’t covered. They will let you know that cover will have been available for 3-12 months at most after you left the country. If this is the answer that you get, confirm when you sent the change of address notification. Then request a refund of premiums that have been paid after the time. If they decline then make it clear that your will make a complaint to their regulator.
so, you need to replace your life insurance
You may be tempted to replace the policy with a domestic policy in your current country of residence. Depending on the country that you are residing in our answer to this in most cases would be don’t.
The first issue is the same one that you have just encountered with the policy that you have recently cancelled. The next time you move to a new country will mean setting up yet another policy. This can present an issue if there’s been a change in your insurabable status due to a health issue. There can also be limits on the level of cover foreigners can get in certain countries. This may mean that you can’t get the cover level that you require to meet your obligations. Finally, there is the currency exposure which could mean that if you have a debt back home. A fall in the policy currency could mean that there is still some outstanding mortgage.
Instead we would recommend that you look to get an international term policy or a non-unitised whole of life policy. This depends on your reason for getting life insurance in the first place. You will have complete portability. If you are posted to another country no need to do anything your policy will just continue. It will provide you with a cost-effective means of providing for your family or ensuring that a debt is paid. They are available in major currencies so you should be able to get coverage in the same currency as or one linked to your debt.