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Taking out life assurance as an expat

An explanation of why life cover policies are more complex for people who live abroad and what you can do to ensure you get the most appropriate cover

Written on 7 February 2020

Life assurance is attractive for many people because of the guarantee of a pay-out when you die, unlike life insurance that will cover you in case certain events happen.

While getting insurance of any kind is a relatively straightforward when you live in your home country, the moment you move abroad it becomes considerably harder. For people that live abroad and relocate on a semi-regular basis, it can be extreme problematic.

It almost goes without saying that if you are working in a remote and hostile location or on board an oil rig in the ocean, it is perfectly understandable that traditional UK based insurance cover would not work for you.

What is more surprising is that if you are simply working in an office in Madrid or Lisbon, most UK insurers will place significant constraints when offering new insurance contracts.

Ultimately, the insurance needs of expats are no different than those of people that live in their home country. Those working expats with families or dependents will need to consider life and critical illness cover and if employers are not providing income protection then this would also be a sensible option to consider.

For the retired expat there may be a concern over how best to use an insurance contract to cover a (for example) UK inheritance tax liability or local death taxes.

There may well be some local insurance options available in your country of residence but quite often these lack the range of covers and options that UK domestic policies would provide and returning to the UK in due course might create issues with these product providers.

Insurance and assurance options available for expats and non-residents

Whilst the majority of UK companies have been reluctant to offer cover in the expat space there are a limited number of specialist providers willing to offer terms.

In particular, several Lloyds brokers are more than happy to offer insurance to expats across the world with special facilities available for those who maybe working in Africa or other more challenging areas and need extra options such as kidnap and ransom cover or specialist medical protection.

Indeed, these facilities not only extend to individuals but also to employers looking for a protection package for their overseas workforce.

Ensuring you are covered when you move abroad

If you are relocating overseas or are already based abroad the first thing you need to do is check any existing policies you may have to make sure your cover is not invalidated because of your occupation or place of residence.

In most cases, talking to a specialist is an excellent first step. A lot of insurance companies will be able to offer guidance on local matters, but will be extremely limited in advice with international affairs. They will often also be limited to assisting to their tied products and be able to offer independent advice.

A good adviser will be able to help you with your life assurance needs as part of your overall financial plan and help assess whether or not there is a gap in your insurance needs and if there is how best to resolve that issue.

Similarly if you are an employer looking to provide a protection package for your employees then an adviser will be able to help you with the options you need to consider such as keyman cover for your most valuable employees and shareholder or partnership protection to ensure continuity of the business operation in the event of loss of your most valuable assets.

There will be solutions whatever your insurance needs but you need to speak to an expert who can assist expats navigate this sometimes complex, but essential, area.