Expat life insurance

Moving to a different country is exciting, but it can also be a daunting prospect. Find out how to protect yourself and your loved ones with expat life insurance.

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Expat life insurance is life cover for people who have moved away from their home country. The policies discussed in this guide relate to UK residents who have moved to other countries.

An expat life insurance policy provides a lump sum to your named beneficiaries when you die. You can choose from a variety of policy options, including one to cover your whole family (this usually only related to children under a certain age).

Why do I need expat life insurance?

Expat life insurance provides the peace of mind of knowing that, if you die, your loved ones won’t have to bear the cost of your funeral and any outstanding debts.

If you live abroad, your family may want to transport your body for burial in the UK. This is likely to be expensive, but your life insurance payout can help with the costs, which can provide great relief to those you leave behind.

Expat life insurance can be particularly useful for people who have retired abroad but have inheritance tax liability from assets held in the UK. Getting life insurance can help manage your inheritance or taxes in a more cost-efficient way.

When wouldn’t I need it?

If you have no dependents who rely on you, no mortgage and no major assets in the UK that are liable for inheritance tax, you may not need life insurance.

That said, even if your children are grown and are financially independent, the payout from your life insurance can provide a financial boost for them to use on things like paying off their own mortgage, taking their family on holiday or paying their children’s university fees. Similarly, if you leave a partner behind, the payout can help make life easier for them.

What are the different life insurance options for expats?

You can choose to take out life insurance for a limited time period or your whole life.

Term life insurance

Term life insurance covers you for a specified amount of time, which can usually be set by you when you take out the policy. There are two options to choose from:

  • Level term life insurance. With this policy, the payout sum remains the same over the life of the policy. This is best suited to cover an interest-only or repayment mortgage, to meet future living costs or to provide an inheritance.
  • Decreasing term life insurance. Like level term life insurance, this policy also pays out a lump sum when you die, but your cover gradually decreases over time, as do your premiums. This will suit if you only want life insurance to cover a mortgage or debt that gradually reduces over time.

Whole of life cover

Also known as life assurance, this policy gives you comprehensive cover for the rest of your life. It’s usually a more expensive option, but you never have to worry about outliving your policy term, which would mean you either have to go without cover or pay over the odds to take out a new policy at an advanced age.

How do I get the best level of cover?

What’s considered the best level of cover by one person, may not be considered so by another. Life insurance is a very personal product, and the specs of the policy depend on your requirements and circumstances.

That said, you may not need to get a new policy at all. If you already have a valid life insurance policy, check with your provider to see if it will still be valid after you move.

If you do need to take out a new policy, the most effective way of finding the best cover for your needs is to shop around and compare policies. Remember that cheapest isn’t always best, so make sure the policy you take out has a sufficient level of cover for you and your family.

In terms of cost, premiums are determined by a number of factors relating to the type of policy you choose to take out and your level of risk. Therefore, if you move to a country with an unstable security or political situation, this might be reflected in your premiums.

Do I need life insurance if I’m living abroad?

That is entirely up to you, as it would mean having to pay a monthly premium.

However, if you have dependents (or adult family members you would like to help out financially when you die), or assets that are liable to UK inheritance law, then taking out life insurance can be a great help to your loved ones after you are gone.

One thing to consider if you live abroad and have close family in the UK is where you would like to be buried. If your relatives are likely to want to bring your body back to the UK, this can be very expensive. Your life insurance payout can help cover the cost of repatriation, as well as other costs involved in your funeral and burial.

Do I need life insurance as a non-UK resident?

If you have dependents in the UK or assets that are liable to inheritance tax, then getting life insurance can be a good idea.

However, if you are not a UK resident, you may have to seek out a specialist policy, as some insurance companies may not offer you cover. It might be worth looking at life insurance companies in your home country or the country you live in (if the two are not the same) to see if you can find cover there.

Bottom line

Losing a close family member is always difficult, wherever they live in the world. However, not having to shoulder the financial responsibility of funeral costs, any mortgage or debts remaining or inheritance tax on assets can take some of the burden off.

Taking out life insurance can help your loved ones pay off any of those items, as well as provide a nest egg for them for the future.

If your dependents are young children, getting life insurance is even more important. For those living abroad who wish to be buried in the UK, the payout can also help cover the cost of repatriating your body.

Compare life insurance providers

Data indicated here is updated regularly
Name Product Cover options Age range at application Cover amount Pays out % claims paid Offer Link
Aegon
Aegon
Level term cover, decreasing term cover, increasing term cover, whole of life cover and family income benefit.
18-84
£1million
If a policyholder dies or is diagnosed with a terminal illness, sum will be paid.
96%
Compare providers
AIG
Level term cover, decreasing term cover, increasing term cover, whole of life cover and family income benefit.
18-84
£1million
If a policyholder dies or is diagnosed with a terminal illness, sum will be paid.
96%
£75 Amazon giftcard. Terms and conditions apply.
Compare providers
Aviva
Level term cover and decreasing term cover.
18-89
£5million
If you die or get a terminal illness and aren’t expected to live longer than 12 months.
98.9%
£75 Amazon giftcard. Terms and conditions apply.
Go to site
HSBC
Level term cover and decreasing term cover.
17-69
£250,000
If policyholder dies, the sum decided will be paid out.
100%
Compare providers
LV=
Level term cover and decreasing term cover.
17-79
£10million
If a policyholder dies or is diagnosed with a terminal illness, sum will be paid
99%
Compare providers
Royal London
Level term cover and decreasing term cover.
18-70
£500,000
If a policyholder dies or is diagnosed with a terminal illness, sum will be paid.
99.7%
Go to site
Scottish Widows
Level term cover and decreasing term cover.
18-64
£2million
If a policyholder dies or is diagnosed with a terminal illness, sum will be paid.
99%
Compare providers
Vitality
Level term cover, indexed term cover, decreasing term cover and family income term cover.
16-74
£20million
If a policyholder dies or is diagnosed with a terminal illness, critial illness could lead to an earlier payment.
99.8%
£100 Amazon giftcard. Terms and conditions apply.
Compare providers
Zurich
Level term cover.
16 - 83
£40million
If a policyholder dies or is diagnosed with a terminal illness, sum will be paid.
99%
£100 Amazon giftcard. Terms and conditions apply.
Compare providers
Legal & General
Level term cover.
18-77
£3million
If a policyholder dies or is diagnosed with a terminal illness, sum will be paid.
97%
Up to £150 amazon.co.uk or M&S gift card with life cover.
Go to site
Canada Life
Canada Life
Level term cover, increasing term cover and decreasing term cover.
18-80
£1million
If you die or get a terminal illness and aren’t expected to live longer than 12 months.
100%
The Canada Life app, access to discounts and benefits.
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