Life Insurance For An Australian Expat In The UAE
When you move to the Gulf and become a Australian expat in the UAE, or anywhere outside of Australia for that matter, it should be an appropriate occasion in which you seriously review and consider life and personal insurance. Life and personal insurance is crucial to holistic expat financial planning because it protects you and your family against the financial ramifications of premature death or ill health. Arguably, you should have plans in place both to protect your life (and that of your partner) and your income, before even considering investments.
Reasons for reviewing your life insurance cover as an expat in the UAE
There are a wide array of reasons why you need to review and consider your life insurance and we have listed below some of the key ones.
- Existing life insurance may not cover you as a expat in the UAE, or may expire after a certain period – In our experience the default group insurance cover that Australians have inside their superannuation in most cases no longer covers them once they become non-residents. In order to keep premiums low, insurance underwriters will often introduce a number of exclusions and trade away benefits, including in many cases cover for non-residents and including those who maybe a expat in the UAE. Most expats do not communicate to their super fund that they have left the country and thus their super funds will continue to deduct premiums even if the super member is ineligible to claim cover. Likewise, comprehensive cover also may not cover you when you move to the UAE or expire after a certain period (often 2 years). Every expat should then call their insurance provider (whether super fund or comprehensive provider) and ask if they are still covered once they become a non-resident. Often call center staff will not have the requisite training to provide appropriate advice on this matter, so we strongly advise to get written confirmation on email.
- Families become more reliant on one, higher paid, income – When there is a change in your personal financial circumstances, like one partner or spouse electing not to work, your reliance on that single income becomes even greater. How would you cope financially should that income disappear?
- Income and expenses will likely increase (including private schooling, travel, health insurance and maintenance of overseas property) – its a well known fact that living in the UAE is not a cheap exercise especially when you need to take into consideration new expenses that you may not have had to take into account in Australia like private schooling and international health insurance.
- Plan for the unexpected – An unplanned departure from the UAE because of death or health issues will result in additional costs. For example it is estimated that the cost of transporting the body of a deceased expat back to their home country is upwards of aed30,000.
Many employers in the UAE will provide corporate life and/or Total and Permanent Disablement cover however it generally is limited to one or two years employment income – which is totally inadequate cover on a stand-alone basis. Also seldom do these corporate insurance schemes provide Critical illness cover (called Trauma cover in Australia). If your employer does not provide adequate cover it is up to you to enter into personal arrangements which provide sufficient additional cover – life insurance should not be considered an optional expense.
Arranging Life insurance
Contrary to popular belief many Life Insurers in Australia will still consider offering cover to Australian Expatriates depending on the individual’s country of residence, ties to Australia, and time away from Australia (in addition to the usual factors of occupation and health). In our experience insurers will continue to offer cover to an Australian expat in the UAE who has been away for less than 3-4 years, and up to 7 years if they still retain some financial ties to Australia (e.g. house still in Australia). Alternatively if Australian cover is not possible then coverage is available through arrangements with International brokers.
We can assist you with all of the above including reviewing your superannuation funds and the insurance cover inside them, along with the arrangement of acquiring comprehensive life and personal insurances.
General advice warning. The information on this site is of a general nature. It does not take your specific needs or circumstances into consideration, so you should look at your own financial position, objectives and requirements and seek financial advice before making any financial decisions.