If you want a plan to pay you a monthly income if you are unable to work due to sickness, accident or disability then you need income protection cover. This does not pay out if you resign or are made redundant.
Peter Bellwood of specialist expat insurance adviser Bellwood Prestbury International says that you should have this cover last until you reach your anticipated retirement age. "Include inflationary increases to make sure the payout from a claim will rise in line with the cost of living and maintain its buying power," advises Bellwood.
If you have dependants who rely on you as the breadwinner you should have life insurance in place. With this cover, or ‘assurance’, a lump sum is paid out to dependants in the event of your death. You can buy plans that last indefinitely or cover a pre-determined term.
"It’s generally cheaper to take out a plan when you are young and your health is good, "says Peter Bellwood. "Do your research before deciding on the best plan for you. Find one that will travel with you on expat assignment. That way you save time and money by not having to keep cancelling the old cover and start a new plan every time you move."
You can also buy cover which pays out if you contract a critical illness. Before you buy this cover check exactly which illnesses are included and which not. This can be a lot more expensive to buy than life assurance because, as Peter Bellwood points out, "you are far more likely to contract a serious illness than die before the age of 65".
There is an increasing threat of kidnap and ransom in some of the main areas where expats work. Insurance which pays out to meet the costs involved in kidnap and ransom cases is expensive, as it generally pays out up to $50 million in ransom demands. So the premiums - typically $2,000 a year per person - are beyond all but the wealthiest.
If you are sent on assignment to a dangerous part of the world you should try to ensure that your employer has this cover. As Peter Bellwood says, "It is important that employers have cover in place if they are sending people into situations where they may be vulnerable. It may be crucial for staff morale to know that their employer does not abandon them."