LIFE INSURANCE FOR EXPATS
Of course no amount of money can ever replace a person. But life insurance polices can provide cash when it’s needed the most. Delivering a specified sum of money at an exact time of need.
Life Insurance is for the living. Should anything happen to you, the life insurance you have purchased is in place to protect and provide financial relief for those who must carry on without you.
Perhaps it is arguably even more important for expats living outside of their home country. Especially with the potnetial complications of relocation, high living costs and private medical bills.
Plan for the worst -Dying suddenly in an accident, by unexpected illness or even of natural causes can happen at any time.
Life insurance helps your loved ones pay the mortgage, bills, schooling and university costs, after you’re gone. It also provides tax-free cash to pay estate and taxes in death. Nothing can replace you in their hearts, but planning ahead with life insurance can make things easier for those you leave behind.
FREQUENTLY ASKED QUESTIONS
Do I really need life insurance?
Although life insurance is not a necessity for all, it can be essential, especially for parents of young children and those who support a spouse or a disabled adult or child. In addition to helping to support dependents, life insurance can help provide immediate cash at death. Insurance proceeds are a handy source of cash to pay the deceased's debts, such as an outstanding mortgage, funeral expenses, and income or estate taxes.
How much cover do I need?
This will vary from person to person. There are a number of things to consider:
How many people depend on your earning capacity?
What are you liabilities?
How long wouold it take for your dependents to become self sufficient?
Are your children young? Consider future costs of education
If you were to die what assets do you currently have that could take care of their needs?
Will your estate owe debts on your death?
If you are comfortable there are enough asetts to cover future costs and expenses, are you liable for estate taxes and if so how much?
Who will the sum assured be paid to?
You chose the benenficiaries. For example you could leave 100% of the benenfit to your spouse. Or you could leave 50% to each of your 2 children. You may wish to consider placing the funds into trust (See comments on taxes). Any additional critical illness cover will be paid directly to you.
Will there be any taxes due on a life insurance payout?
One of the biggest benefits of writing your life insurance policy in trust is that you can actually sidestep paying inheritance tax (in the UK) as the value of the policy will not count towards the value of your legal estate. In the UK normally, when you die, the value of your legal estate is calculated and anything beyond the threshold of £325,000 is taxed at 40%.
What does critical illness cover include?
Critical illness insurance is a type of supplemental insurance plan. Like other supplemental plans, critical illness insurance can help fill the gaps in your health insurance coverage in the event of an unexpected medical event.If you experience a qualifying illness, critical illness insurance policies pay out lump-sum cash benefits directly to you. Qualifying events often include:
What is the difference between whole of life cover and term cover?
Whole of life provides lifelong coverage and includes an investment component known as the policy’s cash value. The cash value grows slowly, tax-deferred, meaning you won’t pay taxes on its gains while they’re accumulating. You can borrow money against the account or surrender the policy for the cash. But if you don’t repay policy loans with interest, you’ll reduce your death benefit, and if you surrender the policy, you’ll no longer have coverage.
How much does life insurance cost?
It will depend on a number of factors. It is possible to shop around and get different quotes from different insurance providers and a financial advsier can help you find the best cover for you. The cost will depend on factors such as:
Where you live
The sum assured and any additional critical illness cover/That is how much cover you require
The term of the policy
Any previous medical conditions
Whether you are a smoker