Moving requires many considerations, whether it is for business or pleasure. While most people think about updating their addresses and telephone numbers with providers, they usually do not believe that their move can affect the validity of policies such as life insurance.
Even if the policy remains in force, it may not be sufficient to support the new lifestyle. When considering a move out of the UK, review life cover to identify whether changes are needed.
Life Insurance Policy Review
The time most people think about life insurance is when the annual premium is due. Someone without life insurance does not usually consider it when moving.
Expats with financial obligations to the UK and those who have dependents are two groups of people who should give life insurance some thought when moving out of the UK.
Life insurance may not be necessary for someone without a financial commitment, but it is essential to consider the impact of your death if you are a parent or spouse. Surviving dependents may not be able to make ends meet.
One way to provide financial support to beneficiaries is to purchase life insurance in your name. During the comparison-shopping process, read the terms and conditions of this type of policy, particularly the details about residency status. The plan might not pay out a claim if the insured was not a UK resident.
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The act of relocating to another part of the world can render life insurance cover invalid. If there is no mention of residency requirements in the policy documents, request clarification from the insurance company.
Provide Notification When Moving
Each time residency status changes, the insurance company should be notified. If an insured person moves but fails to inform the life insurance provider of the new address, the policy may be invalidated.
This results when the insured moves to an area of higher risk from the standpoint of life insurance underwriting. If the insured dies without having supplied the new address to the insurance company and a claim is made by a beneficiary, benefits may be denied.
Lifestyle Changes Created by Moving Abroad
During a move, particularly one that involves relocating to another part of the world, people typically experience lifestyle changes. New jobs, hobbies, change in marital status, and becoming or giving up homeownership are some characteristic changes.
Each situation impacts how much life insurance cover is required to provide beneficiaries with financial security. An insurance provider should be notified of lifestyle changes due to a move so a representative can conduct a review of the premium and cover for adequacy.
Some insurance companies invalidate policies or deny claims due to such lifestyle changes. Taxes vary by country so a level of cover that was adequate in the UK may not be sufficient in another region. A policyholder should verify that cover will pay for inheritance taxes, meet existing and expected future financial obligations, and leave some money for beneficiaries to live comfortably.
Consumers can use an online life insurance calculator to determine how much life cover they need. The figure should be considered a baseline and a professional insurance agent can provide a detailed and personalised number. To find the best cover for the money, consumers should compare quotes offered by several providers.
After binding a policy, the insured should notify the provider of a move outside of the UK and other lifestyle changes.