Expat Life Insurance: Is It Possible To Get Covered?

If you're planning to move abroad, it's important to consider the implications for your life insurance coverage. The process of purchasing or maintaining life insurance can become more complicated for non-residents due to added rules, regulations, and practicalities. While some life insurance policies may continue to provide coverage when you move overseas, others may have exclusions or restrictions that affect your coverage. Therefore, it is crucial to review your policy's terms and conditions before relocating internationally.

International life insurance policies are specifically designed to meet the unique needs of expatriates and global citizens. These policies offer worldwide coverage and provide financial protection for individuals who live, work, or have connections in multiple countries. They are tailored to address the challenges faced by those with an international lifestyle, such as currency exchange fluctuations and country-specific regulations.

When considering life insurance as an expatriate or global citizen, you have several options. You can review your existing policy to understand its coverage limitations and exclusions for living abroad. Alternatively, you can explore international life insurance providers who specialize in offering coverage for individuals residing in multiple countries. These policies often include features such as coverage in multiple currencies, portability across different countries, and the ability to choose beneficiaries residing in different parts of the world.

In conclusion, it is possible to obtain life insurance as an individual living abroad, but careful consideration of your specific circumstances and the available options is essential to ensure you have the appropriate coverage that meets your needs.

International life insurance for US citizens

International life insurance is a type of coverage designed for individuals who live or work in multiple countries or have an international lifestyle. These plans are tailored to meet the unique needs of expatriates, frequent travelers, and individuals with global connections. US citizens can obtain international life insurance, which functions similarly to a standard life insurance plan purchased in one's home country. The policyholder pays regular premiums, and the insurance company pays a death benefit to the named beneficiaries if the policyholder passes away.

International life insurance offers worldwide coverage, ensuring that the death benefit is paid out to beneficiaries even if the insured person passes away abroad. This provides peace of mind for expatriates, who can rest assured that their beneficiaries will receive a death benefit regardless of where they die.

Key Benefits of International Life Insurance:

• Worldwide coverage, including death benefits for beneficiaries if the insured passes away abroad.
• Various coverage options such as term life, whole life, and annually renewable life plans.
• The ability to pay premiums in different currencies and adjust coverage levels.
• Portability, allowing policyholders to maintain coverage even if they change countries or move frequently.

Types of International Life Insurance:

International life insurance typically offers two main types of policies:

• Term Life Insurance: This is the most popular option among expatriates and global travelers due to its economical premiums and flexible coverage terms. Term life insurance provides coverage for a limited period, usually ranging from 5 to 30 years. It offers a consistent death benefit, but most plans are not renewable, requiring the purchase of a new policy after the term ends.
• Whole Life Insurance: Whole life insurance provides lifetime coverage and a guaranteed death benefit. It tends to be more expensive than term life insurance but is preferred by those concerned about future health changes impacting their eligibility for coverage. Whole life insurance also offers the advantage of building cash value over time, making it a stable asset for estate planning and wealth preservation.

Obtaining International Life Insurance as a US Citizen:

US citizens seeking international life insurance should be aware of the following:

• Review Existing Policies: If you already have a life insurance policy and are planning to move abroad, carefully review the policy wording for any exclusions or restrictions related to international coverage. Some policies may have specific expatriate riders or international coverage, while others may have country-specific exclusions or limitations.
• Research Options: Not all US-based life insurance companies offer policies to expatriates. Research providers who specialize in international life insurance and compare their plans, premiums, and restrictions.
• Application Process: The application process for international life insurance may be rigorous and complex. Be prepared to provide detailed medical history, financial records, and information about your lifestyle choices. Some insurers may require your physical presence in the US during the application process.
• US Address Requirement: Some insurers may mandate a US mailing address to qualify for coverage, even if you no longer reside in the country. You can usually fulfill this requirement by using the address of a relative or legal representative.
• Medical Examinations: Medical exams are often required before issuing coverage. If you live abroad, finding an accepted medical facility or doctor may be challenging, and you may need to pay for certified translations of foreign medical records.
• Premium Payments: Consider the currency in which you will pay premiums. Fluctuating exchange rates and international money transfers can impact the amount and timing of your premium payments.
• Local Regulations: The country you are moving to may have restrictions on holding financial products from foreign companies, including insurance. Research the local regulations of your destination country.
• Tax Implications: Understand the tax liabilities associated with your coverage, especially for cash value life insurance. While death benefits are typically income tax-free in the US, they may be subject to local estate or inheritance taxes in your country of residence.

Exclusions and limitations

If you already have life insurance and are planning to move abroad, it is important to review the terms of your policy. Some policies may include travel restrictions, and failing to notify your insurer of your change in residence could invalidate your coverage. Some insurers will maintain your coverage, while others may offer reduced benefits or cancel your policy. Some policies have international riders that specifically cater to expatriates.

It is important to check for exclusions, as some policies may allow policyholders to move overseas but have country-specific exclusions, especially if you are moving to a country with high health or safety risks, or a region considered high-risk by the US government.

If you are earning an income in a different currency, be mindful of fluctuating exchange rates as they can impact your premium payments. When transferring funds from one country to another, account for processing time to avoid late premium payments.

Local regulations in your new country of residence may also affect your ability to maintain a US policy. For example, some countries have restrictions on holding financial products from foreign companies.

There may also be tax liabilities related to your coverage, especially if it is cash-value life insurance. While death benefits in the US are almost always paid out income tax-free, that may not be the case in your new country of residence.

If you are already living abroad and are interested in taking out a new policy, you will find a limited range of options as not all US-based life insurance companies offer policies to expatriates. Some companies offer policies with optional "expatriate riders" designed for American citizens living abroad, which may provide advantages like currency exchange protection or repatriation benefits. However, even an expatriate policy may come with certain travel restrictions. For example, if you need to work or travel to regions that the US government considers high-risk, you may be denied coverage or face higher premiums.

Additionally, some insurers may require you to be physically present in the US at certain points in the application process, such as for a medical exam or signing of the policy.

Getting coverage after moving abroad

If you are already living abroad and don't have life insurance, you will have fewer coverage options. Many insurers are hesitant to take on the risk of insuring someone who is already living overseas. However, many specialty insurers in the US and other countries offer global life insurance options. The application process may be more complex, but if you are in reasonably good health and willing to shop around, you are likely to find coverage.

The application process may be more complicated because medical history and other records may require certified translation. The cost of coverage may also be higher because insurers take the higher perceived risk of insuring someone living abroad into account.

If you are in the process of moving abroad, it is recommended that you try to get coverage before you leave. The application process will likely be easier if completed before moving, as many companies will insist that the life insurance medical exam and policy signing take place in your home country.

If you already have life insurance and are moving abroad, check your policy for any travel restrictions. If coverage isn't an issue in the country you are moving to, you will still need to make sure that you can arrange timely premium payments in the required currency. Fluctuating exchange rates and international money transfers can cause issues with premium payments.

It is important to note that some policies may include country-specific exclusions, especially if you are moving to a country with high health or safety risks, or a region considered high-risk by the government. In such cases, your coverage may be reduced or even cancelled. Therefore, it is crucial to review the terms and conditions of your policy before moving abroad.

Finally, local regulations in your new country of residence may affect your ability to maintain a policy from your home country. Some countries have restrictions on holding financial products, including insurance, from foreign companies. Additionally, there may be tax liabilities related to your coverage, and death benefits could be subject to local estate or inheritance taxes.

Currency and premium payments

• Currency Fluctuations: When living or working in a foreign country, it's important to consider the impact of fluctuating exchange rates on your premium payments, especially if you're earning income in a different currency than your insurance policy. Be mindful of exchange rates and ensure you're paying the correct amount to avoid any issues with your coverage.
• Premium Payment Methods: International life insurance policies typically offer flexible payment options. Policyholders can usually choose to pay their premiums monthly, quarterly, semi-annually, or annually. This flexibility allows expatriates to align their payments with their income and financial situation.
• Currency of Premium Payments: Most international life insurance providers offer the option to pay premiums in major currencies such as USD, EUR, or GBP. Selecting the appropriate currency for your payments can simplify the process and avoid additional currency conversion fees.
• Death Benefit Currency: The death benefit paid out to beneficiaries is typically in the same currency as the premium payments. This means that if you select USD as your premium payment currency, the death benefit will also be paid out in USD. It's important to consider the implications of this, especially if your beneficiaries reside in a different country with a different currency.
• Timely Payments: Regardless of the currency and payment method chosen, it's crucial to make timely premium payments to maintain your coverage. Late or missed payments could result in lapses in coverage, which may impact the benefits received by your beneficiaries.
• International Money Transfers: If you need to transfer funds internationally to pay your premiums, be mindful of the processing time. Ensure that you allow enough time for the funds to reach the insurance provider to avoid any issues with late payments.
• Currency Exchange Protection: Some insurance companies offer policies with "expatriate riders" that include currency exchange protection. These riders are designed specifically for expatriates and can provide benefits such as protection against currency fluctuations or repatriation benefits.

Local regulations

If you already have life insurance before moving, check your policy to see if there are any travel restrictions. If coverage isn't an issue in the country you are moving to, that's great. But you still have to make sure to arrange for timely premium payment in the original currency—you don't want your coverage canceled because an international money transfer is lost, or fluctuating exchange rates don't cover the full amount of the payment.

If you don't already have life insurance, try to get coverage before moving abroad. You will have fewer coverage options because many insurers won't take on the risk of insuring someone who plans to live overseas. The companies that do offer such policies take that higher perceived risk into account by charging somewhat higher rates. However, if you are relatively young and healthy, you will likely be able to find affordable options if you are willing to shop around. Also, the application process will likely be easier if it is completed before moving, because many companies will insist that the life insurance medical exam and policy signing take place in your original country.

If you are already living abroad and are looking to get life insurance, you will have the fewest choices. However, many specialty insurers in your original country and other countries still offer global life insurance options. The application process may be somewhat more complex (for example, medical history and other records may require certified translation), but if you are in reasonably good health and willing to shop around, you are likely to find coverage.

In addition to the above, local regulations regarding taxes and inheritance may affect your life insurance policy. While death benefits are almost always paid out free of income taxes in the US, there may be foreign tax obligations for beneficiaries who live abroad. Also, international law as it pertains to estate and inheritance can be quite complex and difficult to navigate, so when purchasing life insurance to protect the finances of beneficiaries who live abroad, consider seeking appropriate legal representation to ensure their needs are met.

Frequently asked questions