Life, medical, critical illness and income protection
Medical cover is essential as an expat as access to quality medical care is not always guaranteed. If public healthcare where you live is insufficient personal cover will be required. It is also vital to check your life insurance and critical illness cover are all valid, especially if your policies were purchased before your move overseas.
If your employer provides insurance for your family, it may also be advised to contract personal cover as unforeseen changes in circumstances could leave you exposed if your cover ends without warning. The earlier you purchase insurance the cheaper it is, so do it early as nobody complains about having too much money.
Level Term Assurance (LTA)
LTA is purchased for a selected term to pay a lump-sum of money to loved ones on death, enabling them to continue to live comfortably. Future liabilities and debts should be accounted for such as university fees and mortgages and once calculated, further capital may be considered for investment to provide an income for those left behind.
Premiums are fixed so you know how much you'll be paying until the policy ends. There is no cash value when the term expires and it pays within the term only. Inflation should also be accounted for as it will affect purchasing power of the sum assured.
Decreasing Term Assurance
Like LTA, decreasing term insurance pays out within a set term. It is designed to cover reducing liabilities as they are paid off with level of cover reducing. Again, there is no investment element or cash value after the term, and no guarantees that all debts will be covered.
Whole of Life Cover (WOL)
Whole of life cover is more costly than term assurance as it pays out regardless of when occurs. The increased cost is a consideration but creates a useful tax planning tool when implemented correctly, potentially reducing the IHT liabilities of those left behind. Cover is available in many structures so always check the terms to avoid surprises.
Investment Linked (WOL)
Whole of life policies can be investment linked, affecting benefits by fluctuating with fund performance as premiums are split between the insurance and investment elements of the plan. The value of the fund is assessed on review dates against the sum assured, and if funds have under-performed the cover can reduce or premiums may need increasing. Always consider therefore, that cover could become too costly or insufficient.
Fixed Premium (WOL)
Cover can be funded in one large payment or with fixed premiums for a set term until, for example, retirement. Cover continues after premiums end making it ideal for when your salary ends. Some policies allows payments of premiums until death, possibly making it very expensive if you live longer so caution is advised.
Critical Illness Cover
Statistics reveal half of us will be diagnosed with a serious illness during our lifetime. If the breadwinner becomes ill and can't work, income can be affected the consequences can be severe. Critical illness cover can be costly owing to the probability of paying out, but the benefits can be life changing just when you need it most.
Critical illness cover pays out on diagnosis of a qualifying condition. If you become ill and can't work, bills, groceries, rent, school fees and mortgages won't stop and without cover, the stress of insufficient funds can be detrimental to recovery.
Lists of illnesses that qualify are provided by insurers and can be confusing. Some but not all cancers may be covered, but heart attacks and strokes will usually qualify. Conditions related to alcohol or drug abuse are not covered.
Most policies are 'life and critical illness' and are paid if you die before making a claim. If a condition is diagnosed as terminal, early payouts will enable you to get your affairs in order. Getting cover is very difficult or expensive once a serious condition has been identified, so always arrange cover as soon as possible. Once you have it, it will be there until it fulfils its purpose if required.
Income protection cover replaces your salary if you lose your job and pays an income. Accidents and illnesses are covered and cover will support your lifestyle until you return to work, reach the age 65 or die, whichever comes sooner.
Get in touch today to discuss your insurance needs and enjoy peace of mind knowing you and your family are protected for all eventualities.