Life Insurance In Saudi Arabia: What's The Deal?

Saudi Arabia has a growing insurance industry, with a unique market structure that differs from other Gulf countries. The country has a mix of smaller publicly traded companies and larger international firms offering various insurance products, including life insurance. While the market penetration for insurance is relatively low compared to the OECD average, it is expanding as the population grows and more expats relocate to the country. Expats in Saudi Arabia can choose from a range of insurance options, including life insurance, to protect themselves and their loved ones. It is important to note that the insurance landscape in Saudi Arabia may differ from what individuals are accustomed to in their home countries, and it is essential to carefully review the terms, conditions, and exclusions before purchasing any insurance policy.

Life insurance for expats in Saudi Arabia

Life insurance is an important consideration for anyone moving abroad, and expats in Saudi Arabia are no exception. While it's not mandatory to have life insurance as a non-national in the country, it's always a good idea to ensure you and your family have financial protection in the event of your death. Here's what you need to know about life insurance as an expat in Saudi Arabia:

Understanding the Need for Life Insurance

Life insurance provides financial security for your loved ones if you pass away. It can be used to cover expenses such as university fees, mortgage payments, or any other financial commitments your family may have. When living and working overseas, it's especially important to have this protection in place, as your family may face additional challenges and expenses in the event of your death.

Availability of Life Insurance for Expats in Saudi Arabia

The good news is that life insurance options are available specifically for expats in Saudi Arabia. These policies are designed to meet the unique needs of individuals and families living and working abroad. They offer worldwide protection and can provide coverage for periods ranging from one to 30 years.

Key Features of Expat Life Insurance

Expat life insurance policies typically allow you to decide on the amount of coverage you need and how the money will be distributed among your beneficiaries. The application process is usually straightforward and can often be completed online. You can choose from different plan options depending on your age, occupation, medical history, and the level of coverage desired.

Reputable Providers of Expat Life Insurance in Saudi Arabia

When considering life insurance as an expat in Saudi Arabia, it's essential to choose a reputable provider. Some well-known international companies that offer expat life insurance include:

• Expatriate Group
• APRIL International
• Cigna Global

These companies have a strong presence in Saudi Arabia and can provide tailored insurance solutions for expats.

Additional Considerations for Expats

While life insurance is a crucial aspect of financial planning for expats, it's important to remember that health insurance is mandatory for all non-nationals in Saudi Arabia. Be sure to prioritize obtaining comprehensive health insurance coverage before or shortly after your arrival in the country. Additionally, take the time to understand the local laws, cultural norms, and any potential safety concerns to ensure a smooth transition to life in Saudi Arabia.

In conclusion, life insurance is an important consideration for expats in Saudi Arabia. By investing in a suitable policy, you can gain peace of mind knowing that your family will be financially protected in the event of your death. Be sure to research and compare different providers to find the best life insurance plan for your specific needs.

International health insurance for US citizens

US citizens travelling to Saudi Arabia are required to have a visa and passport valid for at least six months beyond their entry date. Additionally, they must secure mandatory health coverage for the duration of their stay. This health insurance policy, approved by the Saudi Council of Health Insurance, covers medical emergencies up to SAR 100,000 (roughly $27,000) and includes expenses such as hospital bills, diagnostic services, and medications.

Recommendations for Additional Coverage

While the mandatory health insurance in Saudi Arabia provides a basic safety net, travellers are strongly recommended to obtain additional coverage, especially for trip cancellations, delays, terrorism, baggage delays, and more. Comprehensive travel insurance can provide financial protection and peace of mind in case of unexpected events.

Suggested Components of Comprehensive Travel Insurance

• Emergency Medical Coverage: It is recommended to have at least $50,000 in medical coverage, as the required plan in Saudi Arabia does not meet this limit.
• Medical Evacuation Coverage: This covers the cost of emergency medical evacuations to a suitable medical facility. A minimum of $100,000 in coverage is advised.
• Trip Cancellation Coverage: This reimburses you financially if you need to cancel your trip due to unforeseen circumstances such as illness, injury, death of a family member, or natural disasters.
• Baggage and Personal Item Loss Coverage: This compensates for loss, theft, or damage to your luggage and personal belongings during your trip.
• Delay Coverage: This reimburses you for expenses incurred due to travel delays, missed connections, or trip disruptions caused by factors like flight cancellations or severe weather.
• Emergency Assistance Services: This provides 24/7 support before and during your trip.
• Terrorism Coverage: Given the geopolitical situation in some regions, it is advisable to have coverage for acts of terrorism, civil unrest, or political instability.

Average Costs of Travel Insurance

On average, travellers to Saudi Arabia spend between $350 and $400 on comprehensive travel insurance, with an average trip cost of around $6,500.

Health and Safety Considerations in Saudi Arabia

Saudi Arabia has a low crime rate and robust security measures, but travellers are advised to remain vigilant and informed about local security advisories. The country has a desert climate, so appropriate preparations for heat, sandstorms, and flash flooding risks are essential. Restaurants and vendors in Saudi Arabia generally adhere to high food safety standards, but it is recommended to opt for bottled water to avoid potential drinking water quality issues.

International health insurance is crucial for US citizens travelling to or residing in Saudi Arabia to ensure their healthcare needs are met and to provide peace of mind. By understanding the mandatory insurance requirements and considering additional coverage, travellers can make informed decisions to protect their health, safety, and finances during their time in Saudi Arabia.

Saudi Arabia's insurance market structure

The Saudi Arabian insurance market is structured differently from other Gulf countries. Unlike its neighbour Qatar, which is dominated by a few large insurance firms, Saudi Arabia has a larger number of smaller publicly traded companies. There were 34 Islamic insurance cooperatives in the country as of 2022.

The two biggest insurance firms in Saudi Arabia by market share are Tawuniya (national) and BUPA (international). The Saudi Arabian Money Authority (SAMA) regulates the country's insurance sector.

Compulsory forms of insurance in Saudi Arabia include motor insurance and health insurance. Motor insurance must be taken out on the vehicle rather than the driver, and all vehicles must have at least third-party liability insurance. Health insurance is mandatory for all residents, with Saudi citizens receiving free public health insurance and expats required to take out private health insurance.

Optional forms of insurance available in Saudi Arabia include home and contents insurance, life insurance, and travel insurance.

Compulsory insurance in Saudi Arabia

The insurance industry in Saudi Arabia is still developing compared to countries such as the US and UK. However, it is a fast-growing market, with the population growth and influx of expats contributing to its expansion.

Motor Insurance

In Saudi Arabia, it is mandatory to insure the vehicle, rather than the driver. All vehicles must have at least third-party liability insurance, which covers all costs incurred by third parties in any incidents. Additional coverage can be purchased for loss or damage to the vehicle, or a fully comprehensive insurance package can be bought to cover all costs, including fire, theft, and accidents.

Health Insurance

All residents in Saudi Arabia must have health insurance. While Saudi citizens have free public health insurance, expats must take out private health insurance, often arranged through their employers. Since 2014, private employers have been legally required to provide insurance for employees and their families. Freelancers, however, must arrange their own insurance policies.

From 2015, the Saudi government introduced a new initiative making it compulsory for expatriate visitors to purchase health insurance before entering the country. This insurance, which is part of the visa application process, covers medical emergencies up to SAR 100,000 (approximately $27,000).

Social Security

Saudi Arabia has a compulsory contribution-based social security system, which covers private sector workers and some categories of public sector employees. These workers make monthly insurance payments, which are deducted directly from their salaries. Self-employed workers can choose to voluntarily enrol in a social insurance scheme. Social security payments cover work-related injury costs and unemployment benefits.

Private health insurance for expats

Saudi Arabia has a robust healthcare system, and the government spends more on healthcare than its Middle Eastern neighbours. The country's healthcare system is considered to be on par with fully developed Western countries. However, expatriates moving to Saudi Arabia are advised to purchase comprehensive expatriate health insurance to ensure full coverage.

Here's what you need to know about private health insurance for expats in Saudi Arabia:

Mandatory Health Insurance

Health insurance is mandatory for all residents in Saudi Arabia, and expats must have private health insurance. This is a requirement for obtaining a visa and residence permit. The Saudi government mandates that all foreign nationals and expats have private health insurance or expat health insurance.

Employer-Provided Insurance

For most expats, health insurance will be provided by their employer as part of their benefits package. However, it is important to carefully review the coverage offered, as it may not cover all your needs. Employer-provided insurance typically operates on a co-payment system, meaning that individuals will have to pay a subsidised fee for treatments or doctor visits. Additionally, employer-provided insurance usually only covers basic care, and the co-payments for specialised treatment may be high.

Purchasing Additional Insurance

If the insurance provided by your employer is insufficient, you can purchase additional private cover. This can be negotiated as part of your benefits package or bought separately from international insurers operating in the country, such as APRIL International or Cigna Global.

Coverage

When choosing a health insurance plan, ensure that it covers your specific needs. Basic GP and hospital treatment, emergency treatment, and maternity costs are usually covered. However, coverage for dental care, specialist treatment, and evacuation costs may need to be added separately.

Cost

The cost of health insurance in Saudi Arabia depends on various factors, including the individual's health, frequency of medical care, and strength of the insurance policy. While employer-provided insurance may have co-payments, medications are heavily subsidised, which can reduce overall costs.

Healthcare Facilities

Expats in Saudi Arabia generally use private clinics and hospitals, which offer high-quality care with modern facilities, advanced medical technologies, and highly trained staff. These private healthcare facilities also have shorter wait times, more privacy, and a more personalised level of care compared to public healthcare options.

Language

Language should not be a barrier when accessing healthcare in Saudi Arabia. As one in five people in the country are expatriates, it is easy to find English-speaking individuals. Additionally, many healthcare professionals are themselves expats.

In summary, while Saudi Arabia offers excellent healthcare facilities, expats should carefully consider their health insurance options to ensure they have comprehensive coverage for their specific needs.

Frequently asked questions