Income protection is paramount

An increasing number of employers are sending staff overseas, but many companies are unaware of the need to ensure they have the necessary income protection in place.

Snapshots of the expat lifestyle show an appealing picture of sunnier climes, healthy living and lavish pay packets. According to a Bupa survey conducted in 2008, over three-quarters of expats believe their lifestyle is better in their new country. NatWest claims the average expat wage is £67,000 with 90% of those surveyed considering themselves to be “better off”.

The prospect of leaving for foreign shores has become even more tempting given the dire state of the UK economy. The number of employees on international assignments has increased by over 90% over the last three years, according to a recent benefits survey by human resources consultancy Mercer.

However, the expat lifestyle brings its own anxieties, especially over finances. According to the same Bupa survey last year, almost three-quarters of expats are concerned about the credit crunch and the negative impact of currency fluctuations. More expats are looking to the insurance industry to provide security. International insurance specialist William Russell claims it has seen a 50% increase in sales of income protection (IP) insurance to individual expats over the past two years.

The provider is now hoping to see a similar level of interest from employers. It believes that more companies sending staff overseas will come to realise that they have a responsibility for their staff’s financial wellbeing when abroad.

Consequently it has just launched an IP plan designed especially for SMEs. Sales director James Cooper claims the product demonstrates an insight into the specific needs of expats.

William Russell says that IP for a sample of ten employees (aged 21 to 52 and located in Europe) with an average salary of £66,666 and a maximum benefit at 75% of £50,000 per person would cost £11,844. It is often offered to a single category of employees such as managers, according to Cooper.