Life and health insurance can be a good idea for an expat. Why? It can reduce inheritance tax in some aspects, it means you are covered if you are ill and if you are expecting the worst then it means that you can ensure that you make sure your family will be financially sound.
What is Whole of life insurance and why you might need it?
The whole of life is a different type of Life policy, that works differently from the traditional pay monthly and protection up to a certain amount in case of death.
Why is it different?
You can invest it and use it as an investment policy (this can come in different formats linked with or without profits) so this can be used as an investment portfolio, as well as a life insurance policy.
Is there a set length?
There is no set length for the policy, but it does have a set number of years and is usually a medium to long term plan (10-25 years).
What is the protection level?
This can be set to your needs, the protection level is capped at 7,500,000 USD.
How much is it?
The requirements are 200 USD a month or the currency equivalent.
What are the funds?
The funds have 3000 in most plans will have to access to a wide range of funds. See what a fund is here and how it can benefit you as an investor to make income just by reviewing it every 12 months.
Under what circumstances do I need this?
This is actually a key protection policy and from a financial perspective, it is a requirement for a financial adviser to explain this to you. As many people don’t consider or use protection policies.
If you are the sole dependent or at least the main dependent in a partnership or family and you were to die this would potentially leave lots of fees charged to the next in kin. These could range from mortgage repayments to child fees costs. This can be used to facilitate this under the policy and ensure sufficient cover is maintained (up to the set specified amount) to your next in kin to cover these costs.
People that need this are:
- Those that have a family that relies on them financially
- The sole earner in a partnership
- Have a joint mortgage
- Have children/dependents that they are currently funding. For e.g Schools
What happens if I don’t die when the term has finished?
If you come to the end of the policy and you don’t die. Dependent on what option you choose unit-linked, with profits you be entitled to a set amount of the initial investment that you have contributed.
Anything else?
Yes, this can be used as a wrapper for Inheritance tax in some cases if you have ownership of the property with tax laws on IHT you are subject to tax on the set amount this can be high if you have a house of value (Normally the higher range is 500,000 USD in most western countries), that is usually passed to spouse on death leaving them with a large tax bill that is subject to be paid in cash that normally means selling the property, a life policy can mitigate the tax by putting it into a wrapper in an offshore location.
