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“Expatriates – Is It actually Safe To Rely On Corporate Benefits?”
do you rely on your
corporate benefits package?
expat corporate benefits
We’ve been talking to expats about their finances for well over 20 years now.
And one thing we hear all the time is “I’ve got that with my corporate benefits package“.
So, the question we’re going to ask you today is…
Should you be relying so much on your company’s corporate benefits?
You might not know the answer right now though by the end of this article you will.
You’ll know the potential risks in doing so. Plus we’ll help you assess just how heavily you rely on them and what you can do about it if you do.
why pay when you can get it for free?
To this day I find it so surprising how willing expats are to put the wellbeing of their family in the hands of our employer.
Don’t you find that strange too?
Or it could be that you don’t…
You could be thinking why waste your money when someones giving you it for free?
Right?
So, that’s your reason and it’s a good one right?
You can spend the money on something else or even invest it.
Plus you don’t have the hassle of sorting it out for yourself and that alone is a massive bonus.
Is there any downside to this, surely there can’t be? Something for nothing that you don’t have to lift a finger to get.
It’s time to start digging and find out more.
So here we go…
here's some straightforward questions on your corporate benefits package
If you’re prepared to put so much reliance in the benefits package that your company provides, then these should be pretty easy for you to answer.
What exactly does your employer provide?
If you’re confident that you don’t need to do anything else then surely you know this?
Right now you’re probably scratching your head
Don’t worry, it’s the most common reaction when we ask this question.
Most expats don’t have a clue about what they get in their corporate benefits package
They know that they get one and that’s enough…
That is until it comes to making a claim and by that time…
Simply put, IT’S TOO LATE!
So let’s break it down and ask you another question that might be an easier one to answer
Do you get life insurance?
You’re saying yes!
Great!
How much cover do you get?
I know, we’re getting tricky again
What is 3, 4 or 5 times salary it could even be as high as 10…
That sounds like a lot, Right?
Is it though, is it enough?
How much would actually be enough?
The answer to that is 3,4 or 5 times salary won’t be anywhere near enough, not if you don’t have cover elsewhere.
10 times might be is though that depends on quite a few other factors
How much life insurance do you need? Isn’t a question we’re going to answer right here. Though if you follow the link above we can help you do that.
What else do you get?
Accidental death, critical illness maybe disability cover?
Maybe, you only get the life cover!
You get health insurance, though?
Again, you’re nodding with a bit more confidence now…
Good!
Yes, you guessed it we’re going to ask you some more difficult questions…
Does it cover your whole family?
Yes!
Are you 100% sure about that?
What does it cover?
Are your GP visits or outpatient procedures included?
Or is it just major medical and inpatient care?
Is the policy domestic or international?
Does this even matter?
Well, what if you can’t get the treatment that you need in the country where you’re living?
Would the policy pay for you getting the treatment you need in another country?
If you’re corporate benefits package is what your family’s relying on…
Don’t you think that you should be able to answer these questions?
You get the point, Right?
Even if you did know what your company provided it doesn’t mean it still does
Companies change the providers they use and sometimes this means the benefits change
When times are tough and companies need to save money and benefits get cut
Would you know if they did?
So, you should be asking some serious questions now
And the answers you get will shape your view on what you need to do next…
blind faith
By now you should agree that putting so much faith into something that you know so little about, is an issue…
Also, we get that the money you save is a big reason why you choose to rely on corporate benefits so much
Is it the only reason?
We don’t think so!
Becoming an expat is a big step out of your comfort zone
There’s so much that you have to do and so many adjustments the you need to make
You move away from your friends and families to somewhere unfamiliar where you don’t know anyone.
Right?
Of course it does, we’ve all been there
And as an expat you look to your company to fill some of those gaps.
You become more reliant on them because they’re the thing that’s most familiar to you where you live now
Almost like a surrogate family, so of course they have your best interests at heart?
You know things aren’t exactly like that…
And after everything is said and done you’re an employee
Yet for certain as an expats you view your employer differently
Also, for many people healthcare isn’t something that they’ve had to think about and this may be the case for you
It’s just been there and you’ve always taken it for granted because that’s the way it was
So when it seems as though it’s been taken care of for you by your company
Then that’s completely normal
Why would you ask questions?
The thing is though, it isn’t the same situation anymore at all
We’ll go on and talk about why later
For everyone expat or not, there’s a period of time when you have an enormous amount of faith in your employers
Until you have an experience that changes this perception
It’s the same reason that Enron employees put their entire pension fund in company shares.
You haven’t forgotten about Enron have you? Maybe you don’t know about that
It’s about you not asking the right questions and acting in your own best interests
And that’s because you’ve got so much faith that your company is doing that for you!
After all your employer wouldn’t put profit above employee welfare, would they?
misplaced loyalties
You know what, it’s possible that they wouldn’t right now they might really have their employees interests as a main priority
Though answer this, what about the next CEO will they go in the same direction?
What if your company gets taken over does the new parent company have the same values?
Or the next time that the companies results aren’t looking so good
Will corporate benefits suffer as a result?
You’d be surprised at how often this is the case and employees take a back seat to shareholders…
How are we so sure that this can happen?
Well, we can be because there’s so many examples of it happening
Answer this question for us…
Why in the UK are over 90% of all company defined benefit schemes underfunded?
And they aren’t only slightly underfunded, it’s a massive amount by over £340 billion!!!
Despite ongoing warnings from pension regulators the whole just keeps on getting bigger
Yet bonuses for board members hits record highs and dividends keep getting paid
These aren’t only small companies that we’re talking about,
BAE and British Telecom are some of the biggest offenders!
And it isn’t unique to the UK either, it’s a global issue…
Here are just a few that have faced the same issues:
- Dupont,
- Hydro One,
- Bank of Kyoto,
- Evonik
- Solvay
If your employer can’t fund your company pension properly
Then what makes you think that you’ve got adequate protection benefits from them?
Right?
We’ve already highlighted how corporate cultures can change
And that corporate benefits that a company’s providing can alter as well
This is a point that we made earlier and we make no apologies for making it again…
Would you know if your corporate benefits package was far less generous than it was 18 months ago?
How would you know if it was no longer adequate?
when corporates benefits let you down
We had a client who worked in Singapore for a multinational cosmetics company
Each year we’d raise the question of a protection benefits review. And each year he’d give us the exact same answer…
“I get all that through my employer”
We’d ask if he knew what he got from his benefits package
And he’s answer:
“This company’s got a great reputation, so there’s no point in spending my money”
We left it there and eventually stopped asking
A few years later we got a call from him and asked if we could go and see him
To our surprise he said that he needed to set up some health insurance
He must have changed companies or gone out on his own
He hadn’t he was still with the same company
So why the sudden change of mind?
Well it turned out that he’d needed an angiogram and angioplasty
His company scheme didn’t cover it because they classed it as an outpatient procedure
He hadn’t realised that his company health insurance would only cover…
Inpatient and emergency medical care!!!
And guess what?
He’d had to pay the US$14,000 bill out of his own pocket
(That was 14 Years ago so you’d be looking at upwards of 20K today at least)
So, NOW, he’d decided to take a look at his corporate benefits package
It turned out that it wasn’t anywhere near as good as he thought it was
Now he wanted to set up an international health insurance policy for himself
We’ll comeback to our friend later and find out how that turned out for him
First let’s highlight something that is really important for you to understand
As medical procedures have improved the need to stay in hospital has reduced
So more and more procedures can be done on a day/outpatient basis
And as a result insurance companies have started to exclude them from inpatient/major medical policies
So if you’re company scheme doesn’t cover outpatient procedures
Then the list of what it will cover is getting smaller and smaller each year
So who’ll end up paying for that?
And believe us when we say good healthcare doesn’t come cheap
who's getting covered
So, you’re an employee and you’ve got health insurance…
Do you know that this cover extends to your family?
For sure, 100%?
You may think that this sounds crazy,
How could your company not provide healthcare for your family
Well you’d be surprised how often expats find out that their family aren’t
One example that springs to mind was a couple in Kuala Lumpur
They’d been living in Malaysia for a couple of years
Their three year old had got a cut which got infected and started to go sceptic
Their doctor gave them some antibiotics to clear it up. Though their son couldn’t keep them down and they weren’t doing their job properly
The infection got worse and their little boy got admitted into hospital. He was put on a course of intravenous antibiotics to clear up the infection
Three days later everything was under control and he was ready for discharging.
His dad gave the hospital his insurance details.
The hospital said that he had to provide a payment method to clear the bill before they could complete the discharge.
He assumed that there must be an excess that he needed to pay. So he was confused when he found out it was the whole bill that needed paying.
He asked why they hadn’t used his insurance to cover the bill
The hospital staff told him that his son wasn’t included on the policy
He thought it must be some kind of mistake
He paid the bill £2,700 and took his son home
When he went to work he checked with his company’s HR department
They confirmed that what the hospital had told him was correct
He was the only one covered by the company policy
He should make his own arrangements for his family
So he contacted us
when your company uses a local policy
So why would this be an issue?
Surely, as long as your policy covers you where you live that’s all that matters
Right?
What happens if you can’t get the treatment that you need in that country where you’re living?
What then?
Well you have to compromise and accept the care on offer. Or you get the treatment that you need and pay for it yourself.
Don’t think that can happen?
Here’s an example of how the type of policy that you get can make a difference, which you should find enlightening
A couple that we knew had moved to Malaysia from the UK
They had a five year old daughter
During a routine eye check up the ophthalmologist spotted something that wasn’t right
She told the girl’s mum that she should get her checked out at the doctors as soon as possible
She took her to the hospital where the little girl had tests and scans. They discovered that she had a malignant brain tumour.
Fortunately, they’d caught it early, though it would need an aggressive treatment regime
The little girls parents were really happy with the doctor that they were using
Though he told them that their daughter would really benefit from having specialist nurses to care for her during her treatment…
And they weren’t available in Malaysia
So they started to explore their options
One thing they considered was going back to the UK, so that they were near friends and family
The problem with this was…
That there wasn’t a specialist paediatric oncology ward at their local hospital
Which meant that their daughter would be on a general paediatric ward
She’s have a severely compromised immune system and therefore expose to infection with the ward. This could be devastating for her and destroy her chances of recovery!
Another option that was available to them was Singapore
There, they’d have access to the specialist nursing that was vital to their daughters recovery and she’d be on a paediatric oncology ward.
So, that’s what they decided to do
Their daughter received the treatment that she needed in Singapore
She made a full recovery
Her parents could make these choices because the policy that the dad’s employer used…
Was an international health insurance
This meant that they could give their daughter the very best treatment options
If his employer used a local policy then they’d have had no choice but to compromise
With their daughters health!
You get that, Right?
Though it isn’t just health insurance that’s an issue, if you rely too much on your corporate benefits package
time for a change
Let’s assume that you know what your company is providing and it’s good!
So, no need to do anything, right?
Can you guarantee you’re going to be working with them for the rest of your working life?
You can’t!
We’ve known people who’ve worked for companies that offered amazing corporate benefits packages. Even more importantly they loved their jobs and the country where they were living.
This could be you, though as you’re well aware working for a multinational often means change.
Expat postings come to an end, time for a change and a new country.
What choices are available?
Well, there’s Sudan or there’s Sudan.
That’s a choice that we’ve seen people face
And as much as they loved their companies and the benefits packages that came with them
They had no choice and so they changed companies, what would you do?
What then if you’ve put all your eggs in one basket and relied on your corporate benefits package so heavily
If your new employer isn’t anywhere near as generous as your old one?
What are the consequences?
Lets take a look shall we!
so what then?
You’ve changed company…
And as a result your corporate benefits package has taken a serious hit (would you even know?)
Or your new employer doesn’t even provide any at all. You get paid more and they expect you to sort it out for yourself.
What do you do?
Easy, you go and sort out your own health and life cover.
Right?
Well, it might not be that simple
We’re now going to talk about the concept of “Insurability”
“What?” you may say
Insurability is whether an insurance company is going to accept your application
We’ve said this before and we’ll say it again. There’s a saying in the financial services world which is…
“You buy insurance with your health and not your wallet”
This basically means that if you’ve had an illness or suffer from a condition. Then no amount of money will get the insurance company to take you on.
So lets take our client from earlier, the one who worked for the cosmetics multinational
After he’d had his angiogram he asked us to get him some private health insurance for him.
We knew it wouldn’t be easy and that he wouldn’t like what we had to tell him
Though we still tried
We shopped around all of the international health insurance providers.
Every single one came back with the same response…
They’d accept him with an exclusion on the entire cardiovascular system and any condition that could be attributed to it.
They’d cover anything that didn’t relate to this…
And as many conditions do then this was a massive exclusion
He’d pay the exact same premium as someone without an exclusion
Yet he’d get far less cover
We were right, he didn’t like it and he decided it wasn’t worth taking out the cover.
Also, if you find that you need to get life insurance and you’ve had health issues then one of two things will happen
The premium that you’ll have to pay will at least double
Or the insurance company will refuse to cover you.
And if you want to know how this relates to specific health conditions then we’ve covered it here
So what happens now if you’ve been relying on your company for all of your life and health insurance
Well the quick answer is you’re stuck
You and your family are left financially exposed
it can't be me
We all think that things happen to other people
Unfortunately, that isn’t true!
You may also think that by the time anything might happen to you then you’ll be financially secure.
And so it won’t matter to you or your family
Well we’ve got news for you…
Shit Happens!!!
We’ve come across people who’ve had heart attacks, cancer, MS, strokes or even passed away
And not when they’re elderly we’ve seen it happen to people in their 30’s, 40’s and 50’s
People who’ve had a healthy lifestyle can suffer because of they’ve got genetic condition
And guess what they were completely unaware that they’d got it
On top of this there’s also bad diet, bad habits, lack of exercise and stress related conditions
It all impacts your ability to get insurance
Lets be frank
If we knew what was going to happen to us in the future then there wouldn’t be insurance
The fact is we don’t and the vast majority of people aren’t financially prepared to get through such situations
Need help with figuring out what you need?
Our “Expat Life Insurance Series” will help you do that
Find out how you can make sure that you have life insurance that meets your expat lifestyle.
Click below!!!
a healthy attitude to expat corporate benefits
It’s a mistake to rely on your corporate benefits package for personal financial protection.
Not making your own personal provision can lead to some serious consequences for you and your loved ones.
Anything that you’re company provides is a bonus a supplementary benefit!
It shouldn’t be the cornerstone of your protection benefits
This is definitely true for life insurance you should always have your own provision which is calculated to meet your personal situation
When you’re calculating how much you need don’t factor in any death in service benefit at all
As for health cover then look at what your company provides and if it isn’t good enough…
Top up with what you need using another policy of your own
And if you’re putting the health and wellbeing of your family and yourself in the hands of your company
Yet you’ve absolutely no idea what it is that they provide for you…
Then sorry to be blunt, that’s completely idiotic
Because by the time you realise it isn’t good enough then you or your family are going to pay the price.
Then it’s too late and there’s NOTHING that you can do about it
We hope that reading this has made you at least start to want to ask some questions
Though we really want it to make you want to take action…
If you want to know more about protection for your expat life sign up to receive our “Expat Life Insurance Series” by clicking below…
And if you have any questions or need help we’re happy to help…
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