4 Commonly Asked Questions about Getting Life Insurance as a Business Expat – Answered

Being a businessperson working and living abroad can feel like becoming a child again. You have to learn how to do a variety of simple things in a new environment, from understanding how you need to file your taxes to understanding your insurance obligations.

For many, particularly anyone working in a more dangerous part of the world, life insurance brings up many questions. Is life insurance available, will it cost more because of where you’re based, should you buy it through a local or international company? This article will take you through these questions and explain how best to go about getting life insurance as an expat.

Business expat

Question 1: Is Life Insurance Freely Available to Business Expats?

This is undoubtedly the easiest of these questions: Yes.

Fortunately, in today’s insurance environment, there are fewer and fewer things that disqualify you from obtaining life insurance. While that was the case in the past when it came to people with more dangerous professions like pilots, or with diseases like HIV/AIDS, today, insurance companies take a different approach.

That new approach is to simply charge higher rates to reflect the additional risk of a particular hobby, disease, or job, rather than denying coverage altogether. Still, while it’s become increasingly rare to be denied upfront, more claims are being denied after death. It’s important to do your research and make sure you don’t do anything which might cause a later claim denial.

For example, if you’re working in an area with active conflict, bear in mind that many policies actively exclude deaths as a result of acts of war. So if you’re going to be able to get life insurance, what can you expect in terms of cost?

Question 2: Does Life Insurance Cost More for Expats?

This is one of those “it depends” questions. There’s nothing inherently more risky about living in another country from an insurance provider’s perspective. That said, if you live in a country with a high crime rate, or environmental hazards (like, say breathing in Beijing), then you can expect to pay higher premiums to reflect that.

Essentially, this just means that expat life insurance works more or less the same as for anyone else. Your insurance provider will evaluate your risk factors and give you a quote based on those factors. Just be aware that, as for anyone looking at purchasing life insurance, it’s wise to shop around, compare policies, and really read the fine print.

But if you’re searching for the right policy, where should you be searching?

business expat insurance protection

Question 3: Should Business Expats Buy Life Insurance Locally?

This is the main question most business expats have – for good reason, as the answer is a bit complicated. On the one hand, arranging a policy with a company in your country of residence can be risky. You’re likely less aware of the history and reputation of that company, and transferring the policy if you move may cause headaches.

So why not just buy a normal policy in your home country? While that’s generally the best option for most business expats, there are some very important caveats. For example, one company estimates that around a third of life insurance policies held by British expats wouldn’t pay out in the case of their death. Why?

Simple: these policies contain a clause that states that they only pay out to UK residents. If you’re living in your home country and then move abroad, it’s crucial that you look at your life insurance policy and confirm that it’s valid even if you’re living abroad.

What’s the best solution, then? That’s easy too: The ideal course of action is to purchase a policy designed specifically for business expats from a reputable international firm. For most people, this holds the least amount of risk and will keep your family and loved ones protected.

Question 4: Why Do Expats Need to Purchase Life Insurance?

Once again, the answer here is more or less the same as with anyone living in their home country: to help pay for funeral costs and ensure family members won’t face financial hardship in the case of your death. However, there is one important additional reason for expats of all kinds: repatriation of mortal remains.

What does that mean? If you die in your country of residence, this would cover the cost of returning your remains to your home country. Some countries now require you to have an insurance policy that specifically covers this in order to live and work in the country. Often, a life insurance policy will suffice (the assumption being that the money from that policy can cover repatriation).

All in all, this is something to bear in mind. Funerals are expensive, but adding repatriation means significant added cost. All the more reason for expats to consider purchasing life insurance.

Where to Learn More

If you’d like to read more about how specific conditions or lifestyles can impact your life insurance policy, check out the SimpleLifeInsure blog.

About the Author: Eric Halsey is a historian by training and disposition who’s been interested in US small businesses since working at the House Committee on Small Business in 2006. After a life insurance policy helped his family get through a difficult period, he became more interested in the industry. Today, he loves sharing his knowledge of the insurance industry on Simple Life Insure’s blog.