Life Insurance for Australian Expats: What to Know

Life insurance and trauma insurance: for many ordinary Australians, it just makes sense. And for expats, it could be nothing short of a must.

As we mature and fulfil our lives with family and financial responsibilities, it’s prudent to have something in place as back up . . . for you and for your loved ones.

But for Australian expats working overseas and living complex, exciting and potentially riskier lives, taking out life and trauma insurance is important, perhaps even more important than ever before. But like many areas of expat life, it’s an area that is particularly complex and difficult to navigate.

So let’s explore:

Life and trauma insurance for expats – What should you know?

No matter who you are or what your situation is, it’s impossible to plan for everything – and the unexpected often seems to happen, usually when you least expect it.

In the case of life insurance, it means those you leave behind won’t be left high and dry with funeral costs, kids’ expenses, lost income and unpaid debts and mortgages.

And trauma insurance . . . it’s just as important, as it will provide you with peace of mind, knowing that the financial pressures of unforeseen events will be eased for you and those around you, while you recover from life’s hiccups.

But what about if you’re an Australian expat who’s already living abroad, or thinking about doing so in the near future? Exposed to life’s ups and downs whilst overseas, you may find that your existing life and trauma insurance policies may not come through for you in quite the way you imagined, and in some cases not at all.

But why is that?

1. Existing cover

If you have existing insurance in Australia, you may find that as you move overseas and become a resident there, your cover will no longer protect you. So read the fine print, and if possible, get a letter from your insurer confirming that you are covered.

2. Provided cover

If you’ve moved for a new job and it involves life insurance, don’t assume it will fully protect you – read the fine print! You may have even been offered higher pay in lieu of adequate cover or find that the insured amount is not enough if trouble does strike.

3. Getting new cover

Depending on where you’re living, it can be difficult or even illegal in some cases for overseas insurers to cover you. It can depend on how long you’ve been in the country, or how long you intend to stay, and what your job is (and whether you have one).

And if you’re looking for a new Australian policy for your overseas travel, many plans will be reluctant to provide cover if the Australian government regards the country as ‘high risk’ in terms of security.

4. Extra terms

If you are able to secure cover, another issue is the extra terms that you may be subject to as an expat seeking insurance. For instance, in terms of how payments are made, how much is paid out, when the payment will be made, what the claim process is and what waiting periods apply, there may be important differences, exclusions and restrictions in cover for expats.

5. Extra costs

Finally, these extra terms could come along with a higher price for your insurance policy. In addition to that, expat plans can have crucial details missing, like income protection, and even if they are included, the costs can be higher.

Another issue if you engage an overseas insurer is that you may not be covered if you need to return to Australia for health reasons, costing you big in both the short and long term.

Expat Tax Services

The good news is that there probably is life and trauma insurance out there that is suitable, flexible and affordable for your precise circumstances. Finding that ideal policy and navigating all those other tax and financial issues is easier when you’re on board with experts experienced in advising Australian expatriates – so get in touch with Expat Tax Services today to see how we can help.