What about Inheritance Tax ?
When it comes to inheritance tax, where you were born and raised has the strongest bearing on whether you pay UK IHT or not, not where you were living when you die, so inheritance tax is usually payable on a life insurance policy.
Also, if you haven’t made a will this can make things more difficult for your dependents upon your death. When getting your life insurance policy, talk to the advisor about writing the life insurance policy into a trust – it’s a simple procedure that if overlooked could cost a lot.
Should we insure the “trailing spouse” ?
Whilst there may be one breadwinner in the family and one who remains at home (commonly known as the “trailing spouse”), it is still sensible to cover the life of this person too. Legal and General have calculated the relative employee value of such a ‘trailing spouse’ is upwards of £33,000 annually.
Upon this partner’s death, if the breadwinner has to give up their job and remain at home, what would they live on? Alternatively, who will pay for any child-care/additional costs? This is why a life insurance policy to cover both partners is strongly suggested.
Final Tips
As with all forms of life insurance, an expat should shop around for the best deal for their circumstances. Use all the resources you can to compare the options available to you, such as the internet, comparison companies, agents and brokers. It will definitely save you money in the long run. You may decide to use a financial advisor – this is a good idea particularly if you might be looking to make further investments in the future. The advisor will be looking for that repeat business, and will bend over backwards to get you a good life insurance deal.
As an expat it is very important to read the small print of your life insurance policy, in case there’s anything specific to your circumstances that may mean the policy will not pay out upon your death.
Be honest with the insurer about your circumstances, including things like health conditions. Failing to disclose any information could be an extremely costly decision. Above all don’t rush your decision, and read the small print of your policy.