He suggests checking with insurers and getting an answer in writing before a policy is purchased and before a client were to move abroad, as there may not be any information on a provider’s website or in their policy wordings for such a scenario.
Meanwhile, clients who already or plan to live outside the UK may still be able to apply for cover from a UK insurer.
AIG Life, which offers cover for overseas residents, distinguishes between British nationals who are or expect to live outside the UK for the short (five years or less) and long-term.
For short-term expats, life and CI cover can be offered, although incapacity benefits such as income protection cannot. For long-term expats, only life cover is available.
“Being able to manage an ongoing claim, which is the case with incapacity benefits, would be extremely difficult for us for people living outside the country,” explains Roberts.
Indeed, the longer that somebody is outside of the UK or planning to be, the trickier it can be to get insurance, and the more limited it can be in the product types, says Kathryn Knowles, managing director at Cura, a specialist protection advice firm.
“CI cover starts to become trickier the longer that somebody is outside of the UK. The reason for that comes down to, once somebody’s lived outside the UK for so long, the insurer starts to analyse them based on the statistics for that country, as if they were living there forever,” says Knowles.
“Mortality statistics change from country to country, and it’s not just the case of looking at life expectancy. It’s also things like healthcare systems in other countries.”
International insurers
If obtaining cover from a UK insurer is not feasible or possible, the international market may be the next port of call.
“We will always try to get cover in the UK market as it tends to be cheaper, and covered by the FSCS. Otherwise, you are looking in the international market,” says Jonathan Morris, senior associate at John Lamb Hill Oldridge, a specialist protection adviser.
Whether a policy might need to be sought from an international provider can also be a medical and financial underwriting decision.
“For example, we might be offered heavily loaded premiums from the UK provider based on territory, or if indexation is applied for, and the international market may be cheaper,” says Morris.
“If the client does not want to remit money into the UK via premium payments or wants to pay via credit card, or pay the premium in euros or dollars, then an international provider will need to be used.”
