Last updated: 08/06/2023 | Estimated Reading Time: 8 minutes
Many UK residents dream of seeking out warmer climes, especially during retirement. When compared with dreary British weather, the prospect of moving abroad to sunny shores can sound very appealing indeed.
But the dream of retiring abroad isn’t the only thing urging Brits to fulfil their wanderlust. Often, UK residents can find many opportunities in foreign countries, particularly in certain job sectors. These factors have led to over five million Brits permanently living overseas.
However, if you have life insurance or are considering getting life insurance, moving abroad can complicate things. Keep reading to find out how your life insurance cover could be affected and which life insurance policies you should look into, including expat life insurance.
In This Guide:
- How Does Life Insurance Work?
- What Happens to Your Life Insurance Policy if You Move Abroad?
- British Expat Life Insurance
- How to Get Expat Life Insurance
- Life Insurance in the UK: Comparing the Best Deals for You
How Does Life Insurance Work?
Life insurance provides financial support to your beneficiaries (e.g., your spouse, your children or other family members) if you die within the policy term. Upon your death, your life insurance pays out a lump sum of cash to your beneficiaries, which can help them cover funeral costs, mortgage repayments, rent, bills, education expenses, childcare costs and general living costs.
To get this lump sum of cash, you’ll need to keep up with your monthly payments, which are called premiums. The amount you pay will depend on several factors, including the length of your life insurance cover (e.g., 20 years, 30 years, 40 years), the size of your payout, your age, your weight, your medical history, your lifestyle and any pre-existing medical conditions you may have.
What Does Life Insurance Cover?
Life insurance policies will cover a wide range of circumstances, although you should always check with your provider to be clear on the details of your particular policy. In general, life insurance covers most common causes of death (such as illnesses, accidents and even suicide after the first 12 months of the policy), but they usually won’t cover deaths due to illegal activities (such as drunk driving), dangerous activities, drug or alcohol abuse or undisclosed health issues.
Types of Life Insurance Policies
There are many types of life insurance policies to choose from, including:
- Level term life insurance
- Decreasing term life insurance
- Increasing term life insurance
- Whole-of-life insurance
- Over 50s life insurance
- Joint life insurance
You can also add extra cover to your policy to tailor it to your needs, such as income protection insurance or critical illness cover. Some people will even take out multiple life insurance policies if they need different types of cover.
Please Note: Not all insurance providers we work with offer all types of policies. Please do your research and compare quotes before proceeding.
What Happens to Your Life Insurance Policy if You Move Abroad?
If you’re a UK resident with a life insurance policy, you should be aware that your cover may be invalidated if you move abroad. Whether or not this happens will depend on several factors, including the length of your stay overseas, the country you relocate to and what you’ll be doing there.
In any case, you must notify your life insurance provider of your new address if you want your life cover to continue. In addition, you must check the terms and conditions of your policy to determine how this may be affected if you move overseas, and you should also discuss this with your insurance provider.
Length of Stay and Risk
Generally, the shorter your stay in another country, the greater the chance that your insurance policy will continue to cover you. If you’re abroad for under six months in a year, you’ll find it easier to keep your current life insurance policy.
If you’re abroad for over six months in a year or have permanently moved overseas, you’ll likely no longer be covered by your standard life insurance policy, unless your policy already has international coverage. This means you may have to opt for expat life insurance if you still want a UK-based life insurance policy (more on this below).
Risk will also be a factor in whether your policy continues to be valid or continues to be the same price. Moving to or visiting a country that’s considered ‘high risk’ could mean that your policy isn’t valid or becomes more expensive, and the same applies if you’re going overseas to engage in a high-risk activity (e.g. skydiving).
British Expat Life Insurance
If you’re considering moving overseas permanently, life insurance with international cover, also known as expat life insurance, could be the right policy for you. This type of policy is designed for those who reside outside of the UK, which means you won’t have to worry about your life insurance claims being rejected if you die abroad.
You could potentially get life insurance from a provider in your country of residence, but this may not be the ideal solution if your beneficiaries and financial commitments are still based in the UK. It could be more expensive and more difficult to obtain this insurance, and most importantly, your beneficiaries in the UK may struggle to file a successful life insurance claim after your death.
This is why British expat life insurance could be a good choice for many people moving abroad. However, this does mean that you’ll need to keep a UK bank account, as most life insurance providers will want you to pay your monthly premiums from a UK-based account. Some insurers may even want you to retain a UK address to buy life insurance.
How to Get Expat Life Insurance
To get British expat life insurance, you’ll need an insurable interest or financial liability in the UK. This could include:
- A potential inheritance tax liability
- A mortgage on a UK property
- Financial dependents in the UK (e.g., a spouse or children)
- Ownership of a UK-based company
If you have UK-based financial commitments, you are more likely to be accepted for this life insurance. Just like with standard life insurance, you’ll then have to provide medical information and potentially undergo a medical assessment if necessary. If you’re already living overseas, most of this can be done over the phone, and if you need a medical assessment, you’ll probably be able to have this done in your country of residence. Make sure you disclose any pre-existing medical conditions, even if this could increase your life insurance cost or make it harder to secure a policy.
Getting Cheaper Life Insurance
Naturally, many people are worried about the cost when considering getting life insurance or expat life insurance. There are many factors that affect life insurance costs, so understanding these factors can help you get a better deal when comparing life insurance quotes.
First of all, with international life insurance, your monthly premiums will be greatly affected by the country you’ve chosen to live in. Choosing a ‘high-risk’ country can mean that your costs are much higher, or you may not be able to get life cover at all. These factors can contribute to a country being labelled ‘high risk’:
- Political instability
- Prevalence of disease
- Inadequate healthcare services
Other factors that affect the cost of your expat life insurance will be the same as those for standard life insurance. So, if you have a pre-existing medical condition or live a dangerous or unhealthy lifestyle, you’ll have to pay higher premiums. The same applies if you’re older, which is why it’s a good idea to get life insurance when you’re younger and healthier. Otherwise, you could opt for over 50s life insurance if this is right for you, as this type of policy offers guaranteed acceptance no matter your medical history.
Life Insurance in the UK: Comparing the Best Deals for You
Whether you want to access more opportunities, live closer to certain family members or simply enjoy a better climate, moving abroad can be an extremely appealing option. Luckily, with the right insurance policy, you can achieve your expat dreams whilst still ensuring that your family will have financial protection after your death.
However, to get the best life insurance policy for you, you’ll need to start comparing life insurance quotes. By considering how much cover you need, your personal circumstances and how much life insurance costs, you can compare various policies and hone in on the deal that’s best for you.
At Money Expert, we can help you compare life insurance quotes from major insurance providers to ensure you get the right life insurance cover for you. All you’ll need to do to get your life insurance quote is fill in a short form with your details, and our licenced broker partners will do the rest. Get a quote today and learn more about the different types of life insurance policies you could benefit from.