Industry experts have found a “worrying” number of expats do not have life or income protection insurance. A survey, carried out by insurance provider William Russell, revealed 61% of expats have no life insurance in place.
According to the survey, 33% had one of the products in place. A further 6% said they were unsure whether they had this type of protection or not. On the other hand, 70% of expats with life insurance also had health insurance.
William Russell said, while the figures are unsurprising, it is clear expats need to be advised about the risks of being uninsured when death or absence from work due to illness occur.
James Cooper, sales director at William Russell, added, “Although we are pleased to see that a high number of expatriates are making provision against the risk of needing expensive medical treatment whilst they’re abroad, it is worrying to see how many expatriates are not making financial provision in the event of their untimely death, or an illness or accident that would prevent them from working.”
What is income protection?
Income protection plans are commonly available in the UK and Ireland. Other countries have different regulations in place. The aim of this type of product is to support the policyholder should they be unable to work due to illness or an accident.
The benefits are paid to the policyholder regularly and are free from tax. However there is a deferred period, a length of specified time between becoming incapacitated and the benefits kicking in. This can vary from four weeks to as long as 52 weeks. The longer the deferred period the lower the premiums.
Barriers to selling income and life protection to expats have been identified as a lack of international providers, high premiums and EU legislation making provision expensive.