Life insurance (life assurance) tends to be one of the simplest things to deal with when you are relocating to another country.
The difference between life assurance and life insurance
What is the difference between life insurance and life assurance? Basically, they’re the same thing.
Technically, insurance is a contract that pays you out if something that might not happen does happen. On the other hand, assurance is a contract that pays you out when something that is definitely going to happen happens.
As you are, most assuredly, going to die, all life insurance should really be called life assurance but it is increasingly known as life insurance.
The only exception to this is life insurance which is limited and will only pay you out if you die by a certain date. For example, you might be covered only until your 65th or 70th birthday. This, then, would properly be known as life insurance.
Will any existing life insurance policies when you move abroad?
Many people will, by the time they go to live in another country, already have life cover. They may have had it for many years.
The good news is that these policies will almost always still be valid if you move abroad.
In very rare cases there can be a clause that limits cover if you go to live in another country. These are, however, very rare.
Nonetheless, it is a good idea to notify your insurance company if you are going to go and live in another country. This will make it easier if you have to make a claim and you can take the opportunity of confirming that the policy will continue unchanged whilst you’re living there.
New life policies in a foreign country
You may be coming to your new home with no life insurance or with life insurance that is about to expire – for example, a policy that only covers you up to the age of 65.
In this case, there is nothing to stop you taking out fresh cover.
In most of the world, you can choose to take out life insurance from an insurance firm in your new country or from a company based anywhere else in the world.
When it comes to choosing where to insure, the two big drivers will be language and price. Most people find it helpful to deal with a company that can process any claim in their own language – this is especially important when you remember that it will not be you who is making the claim but some relative. As ever, of course, price is not everything and so you need to think about the nature of the cover being offered to you.
What does life insurance cover?
In a life insurance policy, the main cover is the payment of a lump sum in the event of your death. By definition, all policies offer this.
However, other cover can be added. This is often for the commercial advantage of the insurance company but it can sometimes be convenient for the customer to have several types of insurance covered by the one policy. Generally, though, it tends to be more cost effective to have separate policies.
The sort of other cover that can typically be added is cover for specific types of accidental death which might increase the sum covered by the policy or maybe cover you for a longer period than the period covered in the policy – for example, covering you against accidental death for your entire life, whilst the life insurance policy might expire at the age of 70.
The policy could also cover permanent disability or serious illness.
Other life insurance policies will agree to pay the amount you have insured not only on your death but also (instead) if you’re diagnosed as suffering from a terminal illness.
You do need to be careful that you’re not signing up for multiple cover in these areas as you may find they’re already covered by other policies.
The cost of life insurance
The cost of life insurance will vary enormously depending upon the amount you wish to insure, your age and – often – your existing medical conditions.
If you’re thinking of taking life insurance cover you really ought to see a specialist life insurance adviser, who should be able to direct you to the most appropriate policies.
Alternatively – or as a preliminary step before approaching an advisor – you could try one of the comparison websites.