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Income protection - Insurance is an absolute must for the sensible expat
No one likes to think about ill-health and fatality, but when you are living overseas it is absolutely essential to have secure insurance arrangements in place to protect your health and your financial well-being if something untoward happens. In this article, I will consider the products that are available to protect you and your family should the unexpected strike.
International living offers expatriates an excellent lifestyle, with tremendously rewarding career opportunities. Most countries, however, gear their social services and insurance products to the needs of the local population. They may therefore provide expats with a reduced level of protection against life’s emergencies than they would expect in their home country.
It may be that you are living in a city, or in more remote parts of the country. Perhaps you have children, or your partner has joined you. Or perhaps you have been seconded overseas, or you’re going it alone. Whatever your personal circumstances, it’s essential to make sure that you have the right insurance products in place to provide you with the level of protection you need to match your lifestyle.
Protection products Most health and protection insurances are designed for domestic markets and much of their effectiveness is left behind when you pass the border control of your home nation. Some plans may provide some security overseas, but they are not designed for the job. Your level of protection may well be reduced through exclusions, and the claims process could be a nightmare. Expats need protection products designed for international living if they are to provide effective financial security for themselves and their families. Designed specifically for expatriates, these provide full protection all around the world, international claims capability and 24/7 emergency assistance. William Russell is one of only a few insurance providers to offer a suite of specialist insurance plans to expatriate customers. These fall into three main areas:
International private medical insurance (PMI) to give you and your family fast access to the highest levels of medical treatment wherever you are in the world. This should include optional travel and personal accident insurance
International income protection to replace your salary if you find yourself unable to work due to long-term illness or injury
International life insurance to protect your family’s finances if the unthinkable happens and you’re no longer there to provide for them. Plus optional accidental death and dismemberment benefit
International private medical insurance
If you need medical attention you’ll have to visit a private hospital or clinic and pay for your treatment. PMI is designed to cover these costs – but take care as it comes in many guises and as an expat you need to make sure that the policy you buy is geared to the international lifestyle. International PMI is designed to provide access to emergency medical treatment around the world, full emergency medical evacuation cover, local 24/7 emergency assistance and a high level of financial protection.
Our Global Health Elite Platinum plan, for example, provides the widest possible cover with high value benefit for maternity care, routine and complex dental treatment, regular preventive health screening and an exceptionally high amount of cover for the treatment of chronic conditions.
International income protection for salary replacement
Medical emergencies are not the only risks faced by expats. If you suffer an illness or accident that leaves you unable to work for a length of time, you’ll need an income while you recuperate. Income protection policies are insurance plans designed to provide you with a replacement income while you are unable to work. Again it is prudent to buy a plan designed specifically for expats as you are likely to find restrictions in domestic policies which make them unsuitable for the international lifestyle.
At William Russell our Global Income Protection plan is designed to replace up to 75 per cent of your salary to a maximum of £90,000. Payments will be paid continuously until you are either fit to return to any occupation or right up to retirement age if necessary.
Income protection policies tend to pay benefit after a waiting period of at least 3 months. So, by taking this cover you are protecting your salary against long-term absence from work, not just a couple of weeks off to recuperate from minor surgery.
Different insurers offer a choice of varying waiting, or deferment, periods. The longer the period you choose, the more cost-effective your premiums become, but the longer you will wait to receive benefit. For example, if your employer offers generous sickness pay for six months, it would make sense to opt for a six month deferment period so that benefit payments continue to offer you a salary when your employer doesn’t. On the other hand, if you are self-employed, you might decide to take a short deferment period so that you receive benefit as quickly as possible.
When selecting an income protection plan, make sure that your policy includes:
- World-wide cover
Unlike local income protection plans, international insurance will cover every move you make. This will apply whether you are moving internationally from contract to contract, travelling for business or simply returning to visit relatives in your home country.
- Inclusion of regular commissions and bonuses
If you rely on regular commissions and bonus payments as part of your salary, make sure that you can include these when calculating your income for the payment of benefits. This will therefore better reflect your take home pay if you need to claim.
- Compound interest to escalate benefit payments each year
This is of real value to long-term claimants, as benefit payments increase to ensure that claimants can survive on their benefit as the cost of living rises.
- Waiver of premium whilst you claim
You should not be expected to pay your premiums whilst you claim. - Cover reinstated on return to work
The ability to continue your original policy with the same insurer is of great merit. You will be covered in full if you were to suffer a relapse, whilst new cover may exclude the condition that prevented you from originally working as it would be classed as a ‘pre-existing condition’.
- Long-term benefit payments
Your policy should pay benefit for up to 24 months whilst you are unable to return to your job. After this, if you are declared medically unable to return to your job or any occupation by which you are fitted by ways of training, education or experience, make sure that your benefit payments will continue until you reach age 65. - Rehabilitation benefit to ease yourself back to work A rehabilitation benefit will allow you to return to your job in a part-time capacity and continue to receive partial benefit payments until you are fit enough to return to work full-time. This will ease you back to the workplace gently. International life insurance for total peace of mind
Finally, don’t overlook life insurance. It’s an unpleasant thought, but if you have a family they will need protection to provide a reliable income to replace your earnings if you die before you reach retirement age. Fortunately, life insurance is generally low cost and you can easily buy cover providing up to 20 times your annual salary for a low monthly premium. Remember, however, that as an expat many domestic life insurance plans will be unsuitable for your lifestyle. Instead look for an international plan designed with the expat in mind.
At William Russell our Global Life plan provides cover for up to 20 times salary to a maximum of £600,000 for expatriates of all nationalities throughout the world. We also offer optional accidental death and dismemberment which will pay an additional lump sum if you die or suffer a permanent disability as the result of an accident.
When selecting life insurance, make sure that your policy includes: - World-wide cover
- Inclusion of regular commissions and bonuses
- Cover for recreational sports - Whether you enjoy ski-ing, bungee jumping or scuba diving, make sure that your insurance policy will pay out for death caused by the recreational sports you participate in.
- Cover for terrorist attacks
With so much unrest in the world, ensure that you’re covered for terrorist attacks as an innocent bystander.
International plans can have some exclusions or limitations of cover in certain countries, so check where you’re likely to need cover both in the short and long-term. The portability of international insurance generally means that you can keep the same policy in force wherever you go, offering continued cover for existing medical conditions.
Living and working abroad offers the expat an enviable way of life and excellent standards of living. By making sure that you have the right insurance plans in place to protect you and your family’s finances you can ensure you can enjoy the lifestyle to the full.
Contact specialist international insurance provider William Russell on +44 1276 486477 or log on to www.william-russell.com. Tim Slee, Global Sales Director, Bupa International, identifies three key themes that characterise the international private medical insurance (IPMI) market in 2009.
“The first is that IPMI is increasingly subject to regulation, particularly in the key markets of the Middle East and Asia, as local governments look to regulate international providers and protect their domestic healthcare systems from being overburdened by expatriates.” In turn, more international providers are also seeking partnerships with local players, in order to access important expatriate markets.
“Secondly, the development of increasingly tailored IPMI products will allow companies and individuals to exactly match cover to their requirements.” In line with this trend, Bupa International launched The European Health Plan in 2008, specifically designed for expatriates needing international health cover in new EU states such as Bulgaria and Romania. “We see the move towards increasingly tailored products as the future for IPMI, and it is an area we are investing heavily in.
“Finally, no product or service can be immune to the impact of global economic uncertainty.” However, past history suggests that IPMI is likely to be relatively resilient as the need for good quality healthcare while working internationally is seen as essential by most employers and employees and is highly valued by those on overseas assignments. “Indeed, our research shows that peace of mind ranks as one of the top three factors expatriates give for taking our international PMI.
“It will be challenging. The onus will be on providers to help customers on tightening budgets, ensure that they remain well-covered internationally at a price that works for them.” |
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