There are those of us who move abroad to find better paying employment opportunities, who realise that as an expatriate we become less restricted by the fetters put upon us in our own home nation where everything seems to be regulated, even the amount we can perhaps earn…
However, building up a successful career can take time – what’s more, some of us are moving abroad simply to find a better work-life balance, or even to retire. So in other words, we are all likely to be in very different financial positions when we relocate. This fact alone has to be taken into consideration when penning an article such as this, because I’m about to talk about the expatriate insurances you shouldn’t leave home without.
However, I am also aware that not everyone can afford health insurance, life insurance and travel insurance…so I am going to look at what you really need as a bottom line, how you can cut your costs, and answer the question posed by this article, namely ‘can you afford to go abroad uninsured?’
Is Any Insurance Essential?
Insurance is sometimes thought to be a luxury that only those who don’t need it can afford! However, in certain circumstances, there is one insurance that many expatriates really cannot do without and that’s some form of health insurance.
There are countries like America and Germany where having insurance in place is quite simply a requirement if you want treatment…and there are others such as some South American, African and even Eastern European countries where having insurance in place is quite simply a requirement if you want to have access to a doctor who knows what they are doing and who has the facilities to assist you.
However, medical inflation runs at up to three times that of ‘normal’ inflation, making premiums ever increasing and your financial burden as an expat seemingly endless. So, how can you get around this fact and actually afford cover when you really have to have it?
Firstly there is an alternative, you could self-insure – that is, you could pay regularly into a savings account and save the money you might one day need to pay out in the event of a medical emergency. This is probably ‘ok’ if you’re happy only to save to cover an emergency trip to the hospital. It is less likely to be acceptable if you fall ill with a long term or serious illness such as cancer or heart disease as these are the biggies that costs multiple thousands to treat.
So, your alternatives are shopping around. In the UK private health insurers are starting to cotton on to the fact that we would all love private healthcare – particularly as spending on the NHS is being slashed in favour of a war in Afghanistan, and most of the money is going to management meaning people on the frontline of care die daily as a result of neglect. But insurers are equally aware that we cannot all afford private medical insurance and so they’re offering us a range of policy options.
The same options are offered abroad by local insurers, and some of the better international insurers are also offering interesting policy options. In some cases you can increase your excess significantly and thereby reduce your monthly fees, in others you can just insure for major complications and illnesses rather than every day inpatient or routine care. You can cut your premiums if you lead a healthy life, and if you’re willing to fund part of your care yourself, you can slash them even further.
If you can’t be bothered to shop around, ask a broker to do it for you.
What About the Other Expatriate Insurances?
Life insurance is an option you can consider – if you have dependents and significant debts, you’re the main breadwinner and you don’t want to leave your loved ones in the lurch if something happens to you, then life insurance makes sense. But it is by no means an essential – it depends on your conscience! Again though, you can reduce the cost of it. How much would it take to get your family out of trouble if you died? Probably a lot less than you think. What’s more, your company may offer some form of death in service benefit – or you may have a level of life insurance on your car or home policy.
Additionally, if you live a clean lifestyle and are fit and healthy, this cuts the costs of your premiums – so you can help yourself a little here when it comes to finding an affordable policy. If you opt for one that reduces in terms of the payout over the duration of the policy – so that it pays decreasing amounts towards your mortgage and care of your children, you can slash costs. This works for those who are paying towards their mortgage, and who know that as they get older, their children will be able to perhaps contribute more to the household, or at least free up their spouse’s time to go back to work if something awful should happen.
Travel insurance for an expat is less necessary – and costs can be cut on multi trip cover anyway – household insurances are again optional…but sometimes critical. If you live in an earthquake zone you may have to have cover if you have a mortgage – this is to cover the cost of rebuilding in the event an earthquake destroys the property on which the mortgage company has an outstanding loan! However, buildings insurance is usually the much cheaper out of buildings and contents…and perhaps you can consider cutting the amount you insure inside, if you have to make savings somewhere.
Making Your Insurance Decisions – What’s Important to You?
You need to weigh up what’s important to you – if your health and that of your family’s health is more important to you than insuring your garden furniture, your wife’s jewellery or your life even, then prioritise getting good health cover in place. If you’re required to have life or buildings insurance by your mortgage provider, don’t renege on the terms of their deal. If you want to have all your bases covered, call in a financial adviser who can look at your entire financial position, find you ways to slash premiums and save the money you cut from your insurance costs wisely towards more positive aspects of your future life.
