Can Australian expats living overseas take out life insurance with an Australian insurer?
It's possible for Australian expatriates living overseas to take out life cover with an Australian insurance provider. However, there are some important restrictions to be aware of, including:
- Official government warnings for overseas country. Most insurers will not provide cover for expats in countries with a level 5 classification from the Department of Foreign Affairs and Training (DFAT).
- Maximum length of time overseas. Policies will state a maximum length of time of 5 years for Australian expats overseas.
What other forms of cover can I get if I'm an expat?
Expats are not restricted to just life cover. Some providers offer plans for Trauma Insurance, Income Protection and TPD Insurance.
This article will uncover the eligibility requirements of Australian expatriates overseas. Enter your details in the form below if your ready to receive quotes for cover.
How does life insurance cover for expats depend on the country they travel in?
Whether or not an Insurance Provider will offer cover and on what terms is often dependent on the country that they are or intend to reside in. Most life insurers will work through reports from the Department of Foreign Affairs when determining risk levels of countries and in most cases will not insure expatriates in high risk countries (DFAT 5). Warnings on DFAT for countries range from “Exercise Normal Safety Precautions” to “Reconsider Your Need to Travel”. Reasons for countries being considered dangerous can include;
- Terrorist threats
- High rates of kidnapping
- Political unrest
- Serious crime
- Military conflict
Insurers will generally consider each country on a case-by-case basis. In some instances, insurers may place exclusions on the policy depending on the country. For example, the application of a political instability clause is common for many policies. The country travelled to may also impact the length of time that an insurer is willing to provide cover for.
Who is recognised as an expat?
An expat is recognised as an Australian Permanent Resident or one with Citizenship status who intends to live and work overseas for an extended period time but expects to return to Australian is the foreseeable future.
There is usually a restriction on the duration of time that the applicant can stay in the country for the policy to remain in force. Most insurers will only provide cover for up to five years. In the event that the policyholder has no intention to return to permanently live in Australia, an insurer will generally recommend that they seek cover options available in their new country of residence.
Is it possible for expats already residing overseas to take out cover?
For Australians who are already living and working overseas, there are a number of factors that will impact whether or not they can take out cover with an Australian provider. This include:
- Duration of time already spent overseas. Insurers will examine the period of time that the applicant has already spent in the country and how much longer they intend to stay there. As mentioned previously, some insurers will recommend they look to taking out cover from a provider in that country.
- Occupation. An insurer will consider the nature of the person’s occupation while overseas in their assessment on whether or not to provide cover. Occupations that may be considered to carry an extra level of risk (especially in the country being applied for) may carry an extra premium loading or be rejected altogether.
- Legal Requirements of Country. The country may have certain legislation in place that will prevent the foreign workers to purchase a life insurance policy from within their country due to licensing issues.
Other forms of life insurance for Australian expats
Is final expenses available for Australian expats?
Life Cover provides a lump sum payment in the event that the policy owner dies or is diagnosed with a terminal illness and is not expected to live for longer than 12 months. The benefit paid can cover any outstanding financial obligations that the worker may have owing in their country or residence and if necessary provide adequate funds to enable their financial dependents to continue to enjoy their current standard of living.
Financial Benefit Advancement
Some policies will provide a built-in feature that will provide immediate payment of a portion of the sum-insured to cover immediate expenses following death such as, funeral costs and financial planning. This benefit could be a key consideration for expatriates in the event that they were to pass away overseas which might incur considerable expenses, including the cost of returning their body to Australia.
Is trauma insurance available for Australian expats?
Trauma Insurance provides a lump sum benefit payment in the event that the policy owner suffers a medical condition specified in their policy such as stroke or heart attack. The benefit payment can be used to cover immediate and ongoing medical expenses and allow them to continue to enjoy their current way of life if unable to work for an extended period. An insurer may consider the country the applicant intends to stay in before providing immediate cover to determine whether it could potentially increase the likelihood of trauma occurring.
Is income protection and disability available for expats?
It may be more difficult for Australian expats to obtain Income Protection and Disability Insurance as the claims and benefit payment process could be quite complex and difficult for the provider to manage. This is especially the case if the provider requires medical evidence to be provided from a certified practitioner. Most companies will require the injured worker to return home after a period of three months for them to receive ongoing treatment and benefit payments. In some cases, the insurer will freeze the policy until the insured has returned home to Australia.
Relocation Benefit on Disability Policies
Some policies will offer “Relocation Benefit” whereby the insured will be provided with a benefit if they have been travelling or residing overseas and have become disabled for a defined period (usually three months). The benefit, which is usually to a maximum amount, can be used to transport the insured back to Australia.
Who is eligible to take out expatriate life insurance cover?
Some general requirements for expats looking to take out protective cover include;
- Applicant must be an Australian citizen or have permanent residency.
- Applicant must have plans to return to Australian after a period of 5 years. Applicants that decide to stay overseas may be required to take out a policy in their country of residence.
- Any additional medical examination that is required during the underwriting process must be carried out in Australia by an approved medical practitioner.