It’s impossible to predict when our time will come, and no matter what age you are it’s important to prepare for the worst case scenario. A little forethought now can save your loved ones from significant upheaval in the event of your death, especially if you’re a British expat with a UK property financed through a mortgage.
Life insurance for expats is trickier than traditional policies; most UK policies won’t cover you for working abroad, while overseas policies can work out more expensive due to annual review and renewal charges. To help you navigate these complexities, we’ve pulled together a handy expat life insurance guide.
The importance of life insurance
It’s hard to imagine what might happen in the event of your own death, but planning for the future requires a few honest answers to questions such as:
– How would your spouse and/or children survive financially?
– Would your children be able to pursue their education?
– Would your assets, including property, be secure?
– Would mortgage payments comfortably be met?
To put this in perspective, let’s imagine a British expat working in Hong Kong. He/she owns a UK property and rents accommodation while working abroad. The property has a £500,000 mortgage, which is comfortably covered by a salary of £200,000pa.
In the event of his/her sudden death, these payments would need to be kept up; without a mortgage life insurance policy, this could lead to the family being forced the sell their home and other assets. However, with a suitable mortgage life insurance policy, the family home would be safeguarded from this scenario.
Understanding insurance options
There’s no one-size-fits-all life insurance policy out there. Various factors will determine the type of policy that’s suited to your needs, including your marital status, whether you have children, debts and liabilities and your earning capabilities.
For this reason, there are a couple of ways to structure mortgage life insurance for expats, including:
Whole of Life Insurance – This type of life insurance guarantees a pay-out, because it covers you for life. It will pay a tax-free lump sum to your loved ones in the event of your death.
Level Term Life Insurance – Your cash lump sum value remains the same over the length of the policy, unless you choose to alter it. Designed to help protect an interest only mortgage.
Decreasing Term Insurance – Your cash lump sum value decreases over the length of the plan roughly in line with the way a repayment mortgage decreases. Designed to help protect a repayment mortgage.
Life insurance for expats
While there are certainly fewer options when it comes to life insurance for expats, this doesn’t mean you have to resort to annual renewable life insurance, which is often costlier and comes with the headache of renewals every 12 months.
It is possible to access mortgage life insurance, level term, decreasing and whole of life cover as a British expat – you simply have to know where to look. Certain brokers specialise in life insurance for expats, and can help you navigate the complexities of your requirements.
Expat Life Quotes work with trusted providers and are able to offer UK life insurance for expats at UK rates, ensuring you don’t pay above the odds to secure cover for you and your loved ones.
Get your free quote or call +44(0)161 871 1216 and speak to an advisor