Travelling and living as an expat is a wonderfully exciting time but sometimes, with all the excitement, it is easy to forget certain practicalities and the risks that we face. There are some essentials that you need to put in place at the start, not only to protect yourself and your loved ones but also to ensure that you don’t put your family finances in jeopardy.
Below I have put together an essential basic toolkit you need to tackle first in order to avert financial disaster. Once you have all this in place, you can get on with enjoying your new life safe in the knowledge that you have basic financial protection in place.
1. International medical cover
Risk is heightened in the first few months of your life abroad as you acclimatise to your new environment where everything is unfamiliar including driving conditions, food, weather, the beasts that live in your home and garden, the cleanliness of your water and so on. International medical cover is a non-negotiable. Your cover from back home will definitely no longer be valid and while you could go for local cover, which is certainly less expensive, the likelihood of you needing to travel between your home country and your new country of residence, as well as making the most of all the new travel opportunities on your doorstep, mean that an international policy is more adapted to your situation.
Many times we hear the argument that insurance is a waste of money with clients feeling that they have thrown money away on it and never needed to claim. However, we’ve also seen the other side of the coin: those who thought they didn’t need it, got unexpectedly ill and had their savings decimated to foot the hospital bill. Believe me, this is something it’s really not worth skimping on.
2. Repatriation of remains insurance
I appreciate it’s not something that you want to dwell on but if the worst were to happen, most expats would prefer their final resting place to be their home country where they are close to their nearest and dearest. Transportation of remains is certainly not cheap – US$20,000 is the ball park figure although it could be much higher – so this is something you want to include in your insurance. Usually it will be an add-on to a medical policy and will include a local post-mortem if required, all transportation costs including air and ground shipping expenses, the coffin or other container adapted to transport remains and coordination with authorities at both ends for approval.
3. An international will
When you move country, you become subject to the inheritance laws of your new country of residence. That can have huge consequences for your partner and dependents, especially if you are not formally married. The situation is likely to be even more complicated if you have assets in two or more jurisdictions. The only way to be sure that your assets go to the people that you want them to is to make a will. Beware too that some countries have forced heirship laws which can be difficult to circumnavigate. Expert advice is essential in this area. While the concept of an international will does exist, we would usually recommend opting for concurrent wills in each jurisdiction in which you hold assets.
One thing is for certain, not having a will and dying intestate is the worst possible option. It could leave behind all kinds of nasty problems for your family at a time when they are fragile and least capable of dealing with them. These could include a tricky probate process, a lengthy battle over assets with other family members and children left in limbo if official guardians have not been nominated.
And a will is not just something to tick off and forget about, it needs to be revisited periodically and especially after important life events such as a birth, a new job, a relocation, a marriage or a divorce).
Once you have those three essentials in place, you of course need to look at other elements of your finances such as life insurance, education fee planning (if you have children) and retirement planning. More on those topics in future blog posts.
If you’re a rookie expat looking for some assistance with getting the basics in order, I can give you a helping hand while you find your feet. Please do get in touch (firstname.lastname@example.org) if you’d welcome some friendly financial assistance!
I’ve had a range of roles within the industry, from pension fund administration and consulting to banking to life insurer. I’m particularly passionate about employee benefits and possess an excellent understanding of the needs of international employers as well as the benefits expectations of expat employees. This allows me to tailor bespoke financial solutions that best match the requirements for both parties as well as helping expats find solutions for their personal finances.