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Expat Life Insurance with Critical Illness Protection

Expat Life Insurance with Critical Illness Protection

Providing financial security for your family’s future is one thing that every family needs in place. An expat life insurance with critical illness policy can offer the perfect cover after a death in the family which the family will have to come to terms with. If the death occurs to be one of the main income providers the loss can have an even more significant effect on the family that are left behind. Level term life insurance protects your family from the financial loss that they would suffer from in the event of your death. The expat life insurance with critical illness policy pays a lump sum which you determine at the outset upon the event of your death.

Level term life insurance provides cover for a fixed annual premium for the duration of the cover and you can select cover for a term of 1 to 30 years dependent on which insurance company is selected. Terms generally go up to age 65 but if you can prove to the insurance company that you are still in paid employment they can extend this. The sum insured remains ‘level’ for the period of cover so the full amount of the sum insured would be payable regardless of when a death occurred during the cover.

International Term Life Insurance

Level Term Life Insurance providing protection to your family in the event of your death during the term of the cover.

Designed with Expats in Mind

You can select a term from one to thirty years, with annual premiums fixed for the full term.

Expatriate Group’s international level term life insurance has been designed especially for expats and international travellers.

  • Key Benefits of Term Life Insurance
  • Comprehensive ‘any cause’ cover
  • 1 – 30 year cover term
  • Worldwide protection
  • Guaranteed premiums for entire contract term
  • Monthly premiums from £/$/€10
  • Designed with Expats in mind
  • Online application process
  • Cover available to residents of 171 countries

Use A Trust To Ring-fence Away From Inheritance Tax

When it comes to planning your family’s financial future, it makes good sense to take all steps possible to protect their standard of living as an expatriate based away from your home country.

Arranging your expat life insurance in the right way – to give your loved ones the maximum possible benefit – is an important consideration.

One option to consider when taking out life insurance is putting the policy into a trust.

And yet according to insurer Aegon, only 6% of expatriate life-insurance policies in the UK are set up in this way so there may be even less cases written this way for overseas expats

This is surprising as, although this process isn’t necessarily suitable for all people, it can be advantageous in the case of many.

Do bear in mind that if you want to discuss the specific advantages of putting your life insurance policy into trust, you’ll need to speak to an independent legal advisor.

What is a trust?

A trust allows you to set aside an asset to benefit a specified person or people (the beneficiaries).

The asset is managed by a trustee or trustees until such time as the beneficiary is intended to benefit.

So, for example, your spouse may look after property on behalf of your children until they reach a responsible age.

Expat Life insurance policies are such an asset, and putting a policy into a trust can affect what happens to the payout from a policy in the event of your death.

Note: In industry jargon, putting a life insurance policy into a trust is known as “writing life insurance in trust” or a policy is “written in trust”.

The principal advantages to putting a life insurance policy into trust are as follows:

Trusts can help sidestep inheritance tax

Under normal circumstances, the payout from a life insurance policy will form part of your legal estate, and may therefore be subject to inheritance tax.

By writing an expat life-insurance policy in trust, the proceeds from the policy can be paid directly to the beneficiaries rather than to your legal estate, and will therefore not be taken into account when inheritance tax is calculated.

This means the value of your estate may not move above the threshold, depending on your circumstances.

You don’t need probate to be granted in order for the policy to pay out 

Writing  a policy in trust also means payment to your beneficiaries will probably be quicker, as the money will not go through probate.

This is a legal process which confirms an executor’s authority to deal with your possessions.

So, for example, if you leave everything to your spouse in your will, then your spouse will have to get probate granted before they can distribute your money, property and so on.

This process can take a long time, even when there is a will. In cases of intestacy (where there is no will), it can drag on for a lot longer. Timescales for simple probate can be up to 1 year so complex cases can go on for 2 years upwards.

However, if the expat life insurance policy is put into trust, then it can pay out before probate is granted, as the insurance provider will just require a death certificate before paying out.

You could get greater control over your policy

Writing life insurance in trust allows you to specify how you want the proceeds to be paid out. For example, trustees can be appointed to oversee money for the benefit of children under 18.

In addition, setting up a trust means that the payout will go to the people you intend it to.

Does it cost extra?

No. Your insurance provider should be able to provide you with this option for free when taking out the policy.

Some existing life policies can also be transferred into trust. Although if you want to write a life insurance policy in trust, we suggest you speak to one of our adviser’s first so we can explain the benefits and if it would benefit your personal situation to write your expat life insurance policy into a trust.

Critical illness Insurance Can Offer a Degree of Financial Security, to cover you in the event of becoming seriously ill.

Know what you’re looking for?

  1. What is a critical illness policy?
  2. Who needs it?
  3. Should I get critical illness insurance?
  4. How much cover do I need?
  5. Which illnesses are covered?
  6. Your medical history

What is an Expatriate critical illness policy?

Critical illness cover pays a tax-free lump sum if you’re diagnosed with a defined critical illness during the policy term.

Provided you keep paying your premiums, you should be covered throughout the term. Once the policy term ends, all protection stops.

When you take out a policy you can decide how long it will last e.g. until your children have grown up, or until the mortgage is paid off.

Critical illness cover is often available as a combined policy with term life insurance. In these instances, you can often only claim once.

For example, if you get a cash payout after being diagnosed with cancer, the policy is effectively finished. There is usually no life insurance payout if you die at a later date.

Who needs it?

Different people will need critical illness cover for a variety of reasons.

If you’re single, you might want a policy to ensure your mortgage is paid, and some form of cover is often a requirement of the mortgage application.

If you have children, you may want to ensure your family is provided for if you can’t work due to ill health.

Recovering from a critical illness can also mean extra costs for you and your family e.g. making changes to your home or car. Your payout could be used to cover this.

Should I get critical illness insurance?

Most people could benefit from a critical illness policy, but the impact of the premium and the benefit of the payout will vary from person to person.

It’s a matter of weighing up the monthly cost against the benefits of a payout. If you and your family depend heavily on your salary, it could be exactly the kind of protection you need.

If you have no financial commitments or dependents, critical illness insurance may not be for you.

How much cover do I need?

Traditionally, expat critical illness plans pay out the full amount regardless of how serious your illness actually is.

Some offer severity-based cover, where the payout depends on how bad your illness is.

When deciding on how much cover you need, think about what you would lose if you were unable to work due to illness.

Also, think about what financial commitments you would still have, such as children or a mortgage.

Try using our life insurance calculator, which can help you figure out how much cover you may need.

Which Type of illnesses are covered?

Illnesses covered will vary between insurers, so it’s important to check the details of a policy before you buy.

Policies commonly cover illnesses such as some types of cancer, heart attacks and strokes, and may include optional add-on illnesses.

Other conditions that could be classed as critical illness include:

  • Major organ transplant
  • Parkinson’s disease
  • Deafness
  • Traumatic head injury
  • Bacterial meningitis

A critical illness and terminal illness are different things – a standard life insurance policy should cover any illness where you are expected to die within 12 months of diagnosis.

Your medical history

You’ll be required to give some details about your medical history in order to get a critical illness insurance quote.

This is so that an insurer can determine how much of a risk you are, and calculate an accurate price.

It’s important to be honest here – your insurer could void any future claims if they find out that the information on your application is false.

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Phone: 852 9247 7065
Email: [email protected]