How To Buy Expat Insurance

Lisa Smith, BA (Hons), CeFA

Insurance is often low down on any expat’s list of priorities, but the cover is one of those things you are glad you have when the unexpected strikes.

Expats need insurance even if the company they work for provides a comprehensive financial package that includes healthcare, accident and life cover.

Company’s insure the assets that impact on them and will not plug all the financial holes for families and staff, while expats living overseas under their own steam need to organise the right cover for their own protection.

Many view the downside as cost, especially when they are juggling a budget that doesn’t leave a lot of spare cash at the end of the month.

The upside is peace of mind, knowing that should anything happen to you, your loved ones are in a good financial state.

What is insurance?

Specialist brokers will insure just about anything for a price, but the two types of cover most important to expats are personal and general protection.

Personal insurance does what it says – pays out for claims against individuals.

Private healthcare; life cover and protection against accident, sickness and redundancy are all personal insurances.

General insurance provides cover for homes, cars and other inanimate objects.

For both, the cost of cover depends on a risk assessment.

The premium can rise or fall depending on where an expat has a home, so having the right cover in the right country is vital.

UK life insurance will not pay out on a claim from overseas if the consumer is an expat rather than a tourist. Travel insurance will not do the job for the same reason, so arranging good private medical insurance is important – and some countries, such as the United Arab Emirates, will not let expats in without it.

How to buy insurance

Insurance can get expensive if you do not have enough or too much.

Too little cover means a claim might not be met, while too much means paying for cover that will never pay out.

The rule of thumb for buying insurance is ignore the price and focus on the cover offered by the policy.

Cheap insurance is usually a false economy because the features will only offer the basics.

When deciding which policy to buy, think about these points:

  • If you have a complaint, is the company regulated and can grumbles be passed to an independent ombudsman?
  • If the country you are going to is liable to natural disasters or civil unrest, try buying insurance across the border so your provider is unaffected by events
  • Check for gaps in cover and that the start and end dates match your time overseas
  • Make sure you know exactly what the policy covers if you need to make a claim

Insurers mix and match insurance features and offer special deals to try and blur the comparison with other policies.

The best way to compare cover is to take the cost over a year or two, so any discounts are evened out and then directly match the features that meet your needs, such as a replacement car in the same comfort bracket as your own.

Personal protection – types of cover

The main personal protection policies are:

  • Life – A policy paying an agreed amount when you die with pricing taken from age and lifestyle
  • Critical illness – Insurance paying if you are diagnosed with one of a set of specific illnesses
  • Private health – Access to specialists and hospitals for treatment in an emergency or for life-threatening illnesses
  • Income protection – Short term cover paying day to day bills if you are made redundant or are too ill to work.

The difference between term and whole life insurance

Whole life policies give cover until the ay you die, while term life are policies for specific events or periods, like insurance to repay a mortgage on the family home that lasts for the length of the loan.

Most general and private medical insurance companies issue policies for a year., when the risk is reviewed and repriced.

If you want cheap life cover, look at a term policy.

Add-ons like critical illness protection are available from some insurers.

Although whole life policies have a fixed premium, some term policies review the cost after five or 10 years.

Whole of life policies have a surrender value and always eventually pay out on death, but term life cover does not – what you pay in is gone unless you have a claim.

General insurance – types of cover

Everyone has general insurance if they think about it – for the car, home and technology.

It’s easy to stack up duplicate cover that is a waste of money and sometimes policies stuffed in a drawer are forgotten about just when they are needed.

The policies expats need depend on their personal circumstances –

  • Motor – Standard motor policies are typically country specific, so when moving between countries, you need at least the minimum legal cover required there, even if you are passing through on the way to somewhere else
  • Home –Moving your life and belongings overseas will mean putting your trust in an international removal firm, so check their insurance does the job.

After the move, you need to protect those same belongings

  • Gadgets – Most of us travel with a bag of expensive gadgets, such as smartphones, cameras, tablets, computers and games consoles. Many standard policies provide limited cover for gadgets, so buying a top-up policy is worth considering

List what your valuables are worth and reflect the replacement cost in your insurance.

Keep photographs, valuations or receipts to prove your claim. Update them now and then for  changes in value, wear and tear and inflation.

Don’t rely on corporate cover

Expats who lose their job instantly lose the protection of any insurance cover that came with the posting.

Consider a scenario where an expat is overseas, falls ill and cannot return to work for several months. The expat is fired and now has to get home.

Topping up the company insurance package will plug this gap, especially if repatriation costs are likely to come to tens of thousands of dollars.

Costing how much cover expats need

This depends on the expat and where they live. Every expat needs a bespoke insurance solution and the cover should reflect this.

Work out much cover you need by listing outgoings and any extra costs you might have to pay if ill.

The amount should maintain your standard of living should the unexpected happen..

Consider factors like:

  • How much does your family spend each month?
  • How much would pay down the mortgage so they could stay in their home?
  • Is extra to cover required for private schooling and university?
  • Will your spouse or partner pay for help to run the house and look after the family?
  • If you were disabled, would you have to spend to make your home accessible?

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