Is buying a US or Canadian domestic Life Insurance Policy a good idea if you are an Expat?
Living as an expatriate in a foreign land brings with it a multitude of challenges, from adapting to a new culture to understanding the local legal and financial systems. When it comes to financial planning, expatriates often face the decision of whether to purchase domestic life insurance policies from their home countries, such as the US or Canada, or explore alternatives. In this article, we will discuss the reasons why expats might want to think twice before opting for domestic life insurance and focus on global international life insurance policies specifically built for expats instead.
Underwriting Challenges:
Domestic life insurance companies typically underwrite policies based on the assumption that the policyholder resides in the U.S. or Canada full time and require policyholders to be only full-time residents. Also, these policies, by law, usually require you to apply, undergo life insurance health exams if necessary, and receive the policy while you are in your home country. If you're living abroad, this can be complicated, potentially requiring you to return to your home country while the policy is being underwritten. Also, residing abroad can result in higher premiums than quoted, offer limited coverage options, or, once issued, denial of a death claim if you misrepresent your situation by spending a significant amount of time abroad. Avoid misunderstandings, delays in underwriting, or even denial by focusing on an international life insurance policy built for expatriates.
Limited Flexibility:
Domestic life insurance policies may lack the flexibility needed for expatriates who may move to different countries over time or return home. Regulations, tax laws, economic conditions, and personal circumstances can change, and a policy that's not adaptable may become less suitable or, even worse, not be valid when it is needed most.
Higher premiums?
Life insurance premiums are often influenced by factors such as age, health, residency, and lifestyle. As an expatriate, you may find that domestic policies initially might be quoted with a lower cost; however, after underwriting and declaring your foreign residency, they might come with much higher premiums, as you are considered a higher risk. Exploring international alternatives might offer more realistic premium rates and no surprises.
Conclusion:
Before making a decision, expatriates should assess their individual circumstances, explore international insurance, and seek professional advice to ensure that any life insurance policy aligns with their needs and the realities of their expatriate lifestyle. International global life insurance policies are built for expatriates, allowing you to apply and have the policy issued completely while abroad. Working with an insurance broker who specializes in expatriate insurance, such as www.lifeforexpats.com, can help navigate these complexities. Contact us for a free consultation or to obtain a quote.