Wouldn't You Sooner Them Have More Than They Need Rather Than Struggle With Not Enough?
Hi There,
We're now up to Part 5 of our expat blog series that's taking an in depth look at why it's so important that you get your life insurance right. The issues that you face and what this would mean for you family.
Our aim is to take you through the whole process, so by the end you'll be confident that you've got life insurance that's up to the task.
Let's have a quick look at what we've talked about so far...
A Quick Recap
This is what we've discovered so far...
For many of you, life insurance policies that you've set up back home or in another country stop working.
And this happens when you become an expat or move to another country!
And we explored this in some detail...
We then looked at why an international life policy is the only viable option for ALL expats.
This also applies even if you don't see your self moving to another country.
So what next?
Before we get into that let's quickly talk about this...
If you haven't got a copy of our "Expat Life Insurance Confirmation Pack".
It's completely FREE and has resources to help you confirm your life cover still works. It also gives you a step by step guide of how to do that and the questions that you should be asking.
So CLICK the image below and get your's NOW!
We wanted to stay on the topic of expat life insurance and follow on from what we did last month.
We've highlighted this issue that many of you face so now we're going to help you with the solution?
So this month we'll be looking at how you figure out how much life insurance you need.
What's the figure that gives your family financial security, if you're not there to provide.
So let's get on with it...
Figuring Out How Much Your Expat Family Needs
You might be looking to replace a policy that you've discovered isn't working for you anymore. Or you might have had a change in your personal circumstances that triggered you into action.
You know, the birth of a child, getting married or buying a property.
Either way you want to know how much life insurance you should have.
If you're replacing a policy then remember, a lots probably changed since you set the last one up.
So, replacing that policy with the exact same benefit amount might not be your best option.
This is your opportunity to make sure you've got adequate life cover for your expat family. An update or reboot to your protection benefits that reflects your current situation.
If you're setting something up from scratch then knowing how much cover you need may be new to you.
And if this is you, then we're here to help you through that process.
Let's get cracking...
For starters there's two main methods which are as follows:
Multiple of Salary
Real Life Benefit Requirement
Let's take a look at each of these in turn.
Multiple Of Salary Method
What Is It?
This is a very simplistic way of deciding on how much life insurance you need.
The rule of thumb is that you should have 10 times your annual salary of life cover. In theory this should provide enough income to maintain you family's living standards.
So, if anything happens to you your family would get 10 years of your current salary in one chunk. They can then invest it and drawdown from it to live on.
Simple!

Is It Really That Simple?
As with many expats there's a good chance you're currently renting where you live right now. And this is most likely linked to your employment in some way.
So, there's a good chance that if anything happens to you, then that home is soon going to disappear for your family.
And in all probability for many of your families, that expat life is also going to disappear.
So, where do your family go?
This might be something that you and your partner have discussed. Though this might be the first time you've ever considered it. So you could have a plan in place or possibly not.
Either way there's some reasonable assumptions that we can make.
There may be a family home where they can return to...
If there is then is that property completely paid for?
Or is there some outstanding mortgage that needs clearing off?
If there's some debt linked to the property then how much would that reduce the 10 times salary capital sum?
What impact does this have on the income that's available for your family?
Whilst the money in the house is going to keep a roof over their heads. It isn't going to contribute towards paying the bills so, they'll have way less to live on.
What if you don't own a house back home?
What are they going to do then?
How will the 10 times salary lend itself to that situation?
I'm sure that you're starting to get the picture!
Here's An Idea!
So why not just increase the multiple of your salary that you use?

It's a good point, though there's some issues with doing this as well.
For starters the worst thing that you can be is under insured. Though whilst being over insured is preferable, it wastes money.
You don't want to be paying for a whole load of cover that you don't need. And because this method is so imprecise then there's a good chance that this will happen.
There's also another issue with this...
The insurance policy that you have must be equal to some financial jeopardy that you can prove.
Which means you must be able to show that the policy proceeds match your potential losses.
So for example if someone was earning £70,000 per annum and applied for £3 million of life cover. That's almost 43 times their salary so the underwriters would start asking questions.
If the person couldn't come up with a good reason why they needed this much life cover. Then the application wouldn't get accepted.
This is an underlying principle of the insurance industry.
So, if you can't show this then the policy application will be rejected or ruled void.
This is a common issue with joint life policies when it comes to a none working partner.
If the death benefit's based on the working partners income. Then the underwriters would refuse this policy.
Remove the non-working partner and resubmit the policy with the same benefits. The underwriters will accept the policy. The only difference is that the non working partner's been removed and it's now a single life policy.
And it's because there's a link between the loss of the working partners income and that benefit value.
There's no financial justification for the other partner having the same benefit amount. Their loss wouldn't have the same financial impact on the family.
It's harsh I know, though that's how life insurance works.
As you can see with the earlier example the same applies if you over estimate the life benefit you need.
The insurance company will decline the application if you can't prove a link.
So, having a more personalised approach to your life cover means you get exactly what you need.
Let's take a look at how we can achieve this.
Again before we do that...
Here's another reminder!
If you haven't got a copy of our
"Expat Life Insurance Confirmation Pack".
It's completely FREE and has resources to help you confirm your life cover still works. Plus it gives you a step buy step guide of how to do that and gives you questions that you should be asking.
So CLICK the image below and get your's NOW!
Real Life Benefit Requirement
We use this method to get a more accurate assessment of how much life insurance cover you need.
It's based on your personal circumstances. The biggest part of that is what your family need.
When you look at your real life benefit requirement you'll consider all your life cover needs.
You'll focus on three areas of you're personal finance. These are Liabilities, Family Income Needs and your Assets.
Though for today we're going to leave it here.
Next week we'll start to look at each of these areas in detail and what to include in each of these categories. We'll also look at how you extract the information that you need in relation to each of them.
We'll start by looking at liabilities
So join us next week for part 6 of this expat blog series.
Finally!
One more time...
If you haven't got a copy of our
"Expat Life Insurance Confirmation Pack".
It's completely FREE and has resources to help you confirm your life cover still works. Plus it gives you a step buy step guide of how to do that and gives you questions that you should be asking.
So CLICK the image below and get your's NOW!
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