Expat Life Insurance
Life Insurance for Expats in Asia
Life insurance is something that everyone should have in place to protect their loved ones if the worst should happen. For expats living and working in Asia, life insurance should be as important as health insurance. With different types of life insurance available, it is good to know that professional insurance services such as Asia Expats are on hand to guide you through the process of finding the perfect policy for you and your family.
Whole Life Insurance
Whole life insurance policies offer a great deal of flexibility and the policy holder can have the peace of mind of knowing that the level of financial protection is actually quite high. The way the policy works is to ensure that the holder is covered for the whole of their life and there will also be a cash value attached to the policy if it is cancelled at any point.
The policy is adaptable so there are additional benefits and features that can be applied for even more peace of mind. Benefits include serious injury cover, critical illness cover, accidental death cover, long term care needs cover, income protection for the family and accidental death as well as cover for hospitalization. The various levels of cover that are available to you through Asia Expats with your whole life policy mean that you can enjoy the most comprehensive cover that is available. If the worst should happen then your family will have the right level of support.
When you choose a whole life insurance policy through Asia Expats you will have the option of choosing your premium level and you can also relax knowing that if your circumstances should change you can modify the policy to suit. The idea of the policy is that it can meet your personal requirements no matter what your personal situation. You can choose how and when you pay for your whole life insurance policy and where you want the funds to be accumulated. You also get to choose the beneficiaries of your policy, so any pay-out is made directly to those you want to benefit.
Term Life Insurance
Term Life insurance plans for expats designed to provide a financial safety net for their dependants should the unforeseen happen.
Term Life insurance plans are both flexible on the financial level of coverage and the coverage duration, both of which can be adjusted should your circumstances change.
Life insurance premiums for term life plans are usually paid monthly or yearly with a guaranteed lump sum payout in the event of death, critical illness or permanent disability.
Term life insurance plans are increasingly becoming more flexible on the types of protection they cover.
If you have been considering a life insurance policy then you will also have heard the phrase ‘term life’. This applies to a life insurance policy that simply gives a cash benefit in the event of your death or in the event you are diagnosed with a terminal illness. These plans are often designed to cover mortgage payments, death duties, outstanding bills, funeral costs and a financial buffer for those that have been left behind. It is important when buying a life insurance policy what your family will do when you are no longer here. What will they need to survive without worrying about their finances? If you are working and living abroad your health insurance policy may not give you the right cover to look after others when you have gone and your family may need funds to return to their home country.
Term life policies are normally available for anything between five years and 35 years. This will create the financial buffer zone what they need so that they can become financially independent again. You choose the length of the policy to suit your needs.
However, the difference with this type of policy is that it will only pay out if the policy holder passes away while they have the policy and there are not the same number of benefits. You can usually add on a terminal illness cover and this is normally worth the same as the term life insurance policy, so if you are diagnosed with a terminal illness you can claim immediately and get your finances in place so that your loved ones do not have to worry about this after you have gone.
International Life Insurance vs Domestic
Expat entrepreneurs and senior business leaders know the case for life insurance. Ensuring that your wife, spouse and children and their futures are financially secure. But how much coverage is enough and which options should you pick? Being a expat in Asia makes the answer is a little more tricky.
Here are some key points that we advise our clients when shopping around for coverage:-
Buying your life insurance policy from a domestic insurer in the country you living in, generally means your estate gets paid in that local currency, which isn’t usually where the costs will be for most expats. This means your newly bereaved widow/widower will need to find a way to get the money out of the country, which can be time-consuming, frustrating and potentially costly. Of course some foreigners are married to locals that are likely to need local currency, so this might not be a concern for some, but it is a factor certainly worth considering.
Local life insurance plans are also rarely competitive, price and benefit wise compared with international based life insurance.
Another factor to consider is whether you are really covered back home. Ensure that the coverage you have from back home covers you when residing overseas or in several different countries. Often life insurance in home countries is written with the explicit assumption (buried in the fine print) that the country of residence will not change. Residing in Asia might derail your coverage, although your insurance company will be happy to keep taking your premiums. It certainly pays to check.
How Much Life Insurance is Enough?
Once you have found an insurer the next is to consider the level of cover. How much coverage is enough? Calculating the amount of coverage isn’t that hard with some useful rules of thumb. If you are a high earner, then 6-8 times your annual earnings should be enough as a rule of thumb, but it also depends on how many children you have and what aspirations you have for their future. Remember that inflation for education costs is usually twice normal inflation at around 6% and therefore costs continue to rise rapidly. Ivy league education in the US (and many countries for that matter) don’t come cheap anymore.
If you are an entrepreneur the rule of thumb is a bit blurry. Consider your business without you. Would your company survive without you? How much would a replacement manager with your ability truly cost in the open market? If that wouldn’t be economical to run a business with that cost, what would the cost be to shut down the company?
Shutting down companies can be pretty costly in most places. The best life insurance coverage should cover all those costs, plus look after your family. Don’t be surprised if the preferred coverage should be in the $2 million plus range. Coverage isn’t as pricey as you might expect. With 20 years coverage for $700,000 for a healthy 40 year old can be less than $200 per month for peace of mind.
When you choose a term life insurance policy, the team at Asia Expats will explain to you that your premiums will remain the same for the length of the policy. This means that you can always budget for the payments without any concerns that you are suddenly going to be asked to pay out more.
For more information on whole life insurance or term life insurance all you have to do is contact the team at Asia Expats. An insurance professional will explain everything that you need to know, including all the options that are available to you so you can make the right decision for you and your family. Getting a quote for your life insurance with Asia Expats is easy – all you have to do is pick up the phone. We work with some of the leading insurance providers to make sure that there is a wide range of policies available for our customers and we can soon find the right one for you.