How International Income Protection Insurance For Expats Work?
If you are looking to invest as an expat or high-net-worth individual, which is what I specialize in, you can email me (advice@adamfayed.com) or use WhatsApp (+44-7393-450-837).
We do also offer expat health insurance as a side-service.
Introduction
A common oversight is the failure to purchase an international income protection insurance for expats.
There are many causes for this, and perhaps like the majority of workers worldwide, you may not think of it as being essential right away.
For those who disregard the motivations for and advantages of expat income protection coverage, it may mean the difference between maintaining the standard of living you have worked so hard to achieve and struggling to get by on the barest necessities.
What is an International Income Protection Insurance for Expats?
Health insurance, which has a wider definition, actually includes income protection coverage. In the event that a person becomes ill or injured and is unable to work, it serves to protect that person’s regular monthly income.
It also includes life insurance, which is crucial. A lump sum payment is made to the beneficiary of the policy in the event of death of the policyholder.
This means that a reliable international income protection insurance for expats offered by a reputable, well-established international health insurance provider will promise to pay you a certain percentage of your monthly salary. When you pass away, a lump sum payment is made to the beneficiary of your choice.
As long as it takes you to get well enough to work again or until you reach retirement age, whichever comes first, the income protection payment will continue.
The amount of salary you will receive varies depending on the type of policy you choose and the amount of premium you pay, but it should always be estimated to be between 50% and 75% of your regular salary.
What to Expect in an International Income Protection Insurance for Expats?
While you are residing abroad, anything could occur. Depending on your new country’s social security system and your contractual rights to sick pay, you might be unable to work in these circumstances and find yourself without a sustainable level of income.
The best way to protect yourself and your family while residing abroad is with expat income protection, especially if:
- You reside in a nation where foreign nationals who are unable to work are not automatically eligible for welfare payments.
- You are the primary provider for your family, so the loss of your income could significantly lower their standard of living.
- You are concerned about how certain events, like a car accident, a slip and fall, or a serious illness, might affect your ability to work.
- Or if you experience a loss of income due to any other circumstance, such as getting sick or hurt.
For expats, it is particularly crucial because you will probably have monthly expenses to cover, such as:
- Rent
- Utilities
- Car hire/leasing fees
- School fees
Your international income protection policy pays benefits up to 80% of your insured salary (up to a maximum of US$144,000 per year), as long as you are off work for at least as long as your deferment period.
International Income Protection Insurance for Expats: Whom is it for?
Consider purchasing international income protection insurance for expats if you fit into any of the following categories.
- Self-Employed
- Freelance workers
- Working for a company that does not provide such cover as part of your employment contract
Regarding the final category, it is important to understand that the agreed-upon “Sick Pay” specified in your employment contract is very different from expat income protection coverage.
If your employer has consented to pay your wages while you are off work due to illness or injury, they will only do so for a short time. The time frame will vary depending on the company and any applicable regulations, but it is extremely unlikely that it will last longer than a year and, in many cases, much less.
Anyone who has the misfortune of contracting a serious illness, developing a serious medical condition, or being involved in an accident that results in long-term damage will not only need expert medical care and attention, but it is also likely that they will need a lengthy recovery period.
Which countries require expats to purchase international income protection insurance for expats?
Generally speaking, no nation has a legal requirement for expats to have international income protection.
The laws in your new country, particularly those pertaining to welfare/social security, sick pay, and disability pay, should be known to you as an expat so that you are aware of how they affect you. This is due to:
- You might be limited by law to a certain number of sick days each year (e.g. 90 days per year in Dubai)
- As an expat, you might not be eligible for state benefits like disability or sick pay.
- Your ability to make certain payments, like rent and school fees, could be impacted if your sick pay, disability pay, welfare, or social security payments are less than your salary.
Features that International Income Protection Insurance for Expats Must Have
Look for the following features when comparing expat income protection policies for you or your staff:
Maximum Salary Value
Individuals must be covered by international income protection benefit payments for up to 80% of their full salaries, up to a maximum of $144,000. Additionally, benefit payments must be “inflation-locked,” which guarantees that they will always rise by a compound rate of 2% annually.
Monthly Premiums
Your age, the amount of coverage you require, and, in some cases, your health are likely to have an impact on your repayments.
Eligibility Requirements
Many employers specify a maximum age, a minimum standard of health, and will take into account the type of work a worker performs.
If you are over 18 and under 60, in good health, employed in a non-hazardous occupation—typically an office job—and reside in an eligible country.
Term Duration
If you select international short-term disability insurance, the policy typically pays benefits for up to two years. There is no cap on the total amount you may receive during this time; our payment of benefits continues until you return to work, pass away, or turn 65.
Factors that Affect the Cost of International Income Protection Insurance for Expats
The following factors affect how much an international income protection insurance for expats would cost:
- Your health – you’ll pay less for insurance if you’re in good health.
- Your age – as your risk of becoming ill rises with age, the more you are likely to pay when you purchase the policy.
- Your job – You’ll pay more for coverage if you take on risky tasks.
- Hobbies and lifestyle – You will pay more for insurance if you engage in risky pastimes or smoke or drink a lot.
- The waiting period – the longer you can go without filing a claim, the less you’ll pay in premiums.
- Whether you would be willing to perform tasks other than your own if you became ill – if you promise to file a claim only if you are unable to perform any work at all, rather than just your own job, you can usually get international income protection insurance for expats for less money.
Final Thoughts
There is a reason why international income protection insurance for expats is offered. If your monthly income suddenly stopped, think about how you would manage and maintain your current way of life. Those who have families should think about this option for additional reasons.
You can find something that will meet your needs by carefully examining the options available for expat income protection insurance policies.
It is advised that you get in touch with a reputable expat health insurance broker for those who believe comparing the various options will take too much time or for those who would prefer to have a thorough but concise list of all options available.
By doing this, you will receive professional advice and be given options that are appropriate for your situation. This should be yet another “no-brainer,” especially since using a broker’s expertise is free of charge. ”.
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Adam is an internationally recognised author on financial matters with over 830million answer views on Quora, a widely sold book on Amazon, and a contributor on Forbes.
