What are my life insurance options when living abroad?
Expat Life Insurance
As an expat, there are several reasons why you may be looking for life insurance.
It could be that your previous policy has come to the end of its term.
Or it may be that you have found out that your old policy does not cover you now that you are living overseas. You may have had a “life event”, e.g. marriage or birth of a child.
Or you may be looking to use it as a way to mitigate an inheritance tax liability.
Whatever the reason, you need to know the options open to you.
Option 1 – Look for a provider in your home country
Most insurance providers in the UK are not going to let you set up a new policy with them if you are no longer resident there.
In the unlikely event that they do, cover will depend on the country that you are now resident in.
I.e. if you are living in Switzerland, you may be ok.
If you are living in Sri Lanka, for example, they are less likely to cover you.
Additionally, if you subsequently move from safe country A to not–so–safe country B, then you are back to square one.
However, in that case, you are now older, meaning that the cost of cover is going to be greater.
There is also the risk that in the meantime your health has deteriorated and you may not be able to get cover at all.
Option 2 – Look for a provider locally
There are a couple of reasons why this isn’t the best course of action for you.
Firstly, it’s not uncommon for local insurers to have restrictions on foreigners buying life insurance.
For example, the amount of coverage that you can have may be limited.
This could leave you underinsured and your family exposed.
The other factor is that if you move to an assignment in another country, you will be back where you started.
I.e. your cover will no longer be valid and you will be looking at setting up another life insurance policy.
Option 3 – Set up an international life insurance policy that is designed for expats
This is likely to be your best option.
It is what I did when I found out that the policy that I had set up when I was living in the UK no longer covered me once I moved overseas.
With an international policy, the insurer will cover you wherever you live and the insurance will also be valid should you move on to live in another country.
This eliminates the need for you to chop and change policies and as a result you are not exposed to the risk of your health deteriorating and suddenly finding out that you are unable to get cover at all.
Action Point – If you already have life insurance in the UK, get your insurer to confirm, in writing, that you are still covered now that you are living overseas.
❓ Frequently Asked Questions about Life Insurance for Expats
Can I keep my UK life insurance if I move abroad?
Not always. Many UK insurers will void your policy if you become a non-resident. Always check with your provider and get written confirmation of your cover status.
Will I pay more for life insurance as an expat?
Yes, premiums may be higher due to increased perceived risk, especially if you live in a country considered high risk by insurers.
Why might a UK insurer refuse to cover me as an expat?
UK insurers typically require policyholders to be UK residents. If you’re living abroad, you’re outside their jurisdiction and risk profile, which may void eligibility.
Is it a good idea to buy life insurance locally in my new country?
It depends. Some countries restrict foreign nationals from purchasing substantial cover, and policies may become invalid if you relocate again.
What is international life insurance?
International life insurance is designed specifically for expats. It offers global coverage, regardless of where you live or move to next.
Is international life insurance more expensive than local policies?
It can be more expensive, but it offers greater flexibility and continuous cover, even if you move countries during the policy term.
What happens if I move from a low-risk to a high-risk country?
If you hold a local or home-country policy, your cover may be invalidated. International policies typically remain valid regardless of location.
Can I use life insurance to mitigate inheritance tax?
Yes, many expats use life insurance policies written in trust to provide funds to pay potential inheritance tax liabilities.
Does my health affect my ability to switch policies?
Yes. If your health deteriorates between policies, it may limit your ability to obtain new cover or raise premiums significantly.
What should I ask my UK insurer if I already have a policy?
Ask them for written confirmation that your policy remains valid while living abroad, and under what conditions (if any) it could be voided.
Ross is a qualified Chartered Financial Planner and Pension Transfer Specialist.
He has been a cross-border financial adviser for 25 years and specialises in helping British expats manage their finances with clarity and peace of mind.
If you would like to have a no strings chat with him, please get in touch.
