Despite popular belief, life insurance isn’t just for older adults. It’s essential for people of all ages and provides vital protection for your loved ones if and when you pass away.
With life insurance, you can have peace of mind knowing that your family members won’t be left with any financial burdens when you pass. Choosing international life insurance means you have coverage globally, so your family members are protected even if you move abroad.
Understanding more about how life insurance works will enable you to find the most suitable plan for you and your loved ones. In this guide, we’ve covered everything you need to know about getting life insurance as an expat to make your search for the perfect policy as simple as possible.
What Does Life Insurance Cover?
Expat life insurance policies often provide a similar level and range of coverage options. They usually cover the following financial benefits.
Death benefit
The death benefit is the lump sum that your beneficiaries will receive when you pass away. The total payment will depend on the level of coverage that your policy provides and may be split equally or unequally between your beneficiaries, depending on the details of your policy and your predetermined preferences.
The death benefit is a tax-free payment that your loved ones may wish to use for paying outstanding debts and ongoing expenses, or to cover funeral costs.
Coverage for lost income
If your loved ones rely on you financially and you are the main provider for your family, your life insurance policy will offer protection when you can no longer provide for them financially.
Your life insurance provider will replace lost income after you’re gone to ensure your family can still afford to live comfortably and maintain a great quality of life.
Debt repayments
If you are leaving this world in a lot of debt, your loved ones will be left with the financial burden of repaying these debts. Your beneficiaries will be able to use the lump sum they receive from your life insurance provider when you pass away to pay off your outstanding debts, such as personal loans, mortgages, and unpaid credit card balances.
Estate taxes
If you are required to pay estate taxes on the area where you live, your life insurance may cover some of these tax payments. It may also ensure that your loved ones can inherit your assets without paying excessive taxes or needing to liquidate other assets for their inheritance. Moreover, fulfilling such obligations can align with a trustee’s fiduciary duties, ensuring responsible management and distribution of assets according to your wishes.
What to Consider When Getting Expat Life Insurance
It’s never too early to start searching for a life insurance policy. Although it’s not nice to thing about a time when you’re no longer here, it’s part of your long-term financial planning and it’s vital for protecting your loved ones.
Because there are so many life insurance policies out there, all offering unique premiums, deductibles, and types of coverage, it can be difficult to find the most suitable plan for your needs. Here are some important factors to consider that will help you find the perfect life insurance policy.
Coverage area
Many life insurance policies are specific to one country and will become invalidated if you move abroad. It’s important to choose a global life insurance policy if you plan on becoming an expat and living the rest of your years outside of your home country.
A global life insurance policy will cover you across many countries, so you won’t need to worry if you decide to travel as an expat or move around to various countries. It provides a high level of flexibility and protection, regardless of your location in the world. However, it’s important to check the location coverage of your chosen life insurance policy with your provider before committing to anything.
Premiums and costs
Life insurance premiums can vary drastically in price, depending on the level of coverage and voluntary excess. Make sure you find a policy that aligns with your long-term finances, as opposed to your current financial situation. This way, the policy provides enough coverage and protection for your beneficiaries if you pass away in the distant future.
Consider the voluntary excess or deductibles of your chosen policy. The voluntary excess works in a similar way to when you purchase health, travel, or car insurance. It’s the amount of money that your pay beneficiaries will pay out of their own pockets if they claim on your insurance when you’re gone.
Policy terms and conditions
Every life insurance policy has a unique set of terms and conditions that you must understand before you commit to a long-term plan. Your provider will give you a detailed contract to sign when you choose one of their policies and it’s important that you read through every page and don’t ignore the small print.
If there is anything within your life insurance contract that you’re unsure of, be sure to ask one of the customer advisors for guidance so you purchase the best life insurance policy for your and your family’s needs.
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