You might think that you only need to know about life insurance policies in your own country, but if you’ve ever thought about moving abroad after retirement, then it could behoove you to know a thing or two about life insurance in other countries.The Basics:The concept of life insurance is pretty universal. You pay a monthly premium for a certain amount of coverage to go to your beneficiaries when you die. The money can be used to cover your debts, pay funeral and other death-related expenses, and replace your income that would have been going to your dependents.Nowadays, if you move abroad, you will most likely be able to keep your insurance, as long as you keep paying your premiums. You’ll want to check with the provider though before signing up for coverage or making any moves. Also, if you go into a country that is considered “hostile” then you might not be covered if you die in certain circumstances. Be sure you’re completely aware of what your coverage does and does not cover.Most of the regional differences in life insurance lie in taxes. And though you may be able to keep your policy after moving, the way the funds are taxed may change. Here are the life insurance tax policies for some major countries.
United States
Life insurance premiums are not tax deductible, nor are after-death proceeds subject to being taxed, unless they are included in the deceased’s estate. The cash value of policies have very detailed complicated tax rules which can change based on situations and of course, and the whim of the tax law decisions of lawmakers.
Australia
In Australia, life insurance premiums paid through a superannuation fund are tax deductible. Life insurance outside of superannuation is not deductible, however, and the superannuation deductions are subject to age limits. For more information about Australian life insurance, check out the GIO personal life insurance page.
U.K.
Life insurance premiums are not deductible, and when the coverage is paid, it is not counted for income taxes. Like the US, moving to hostile countries can affect coverage, and changing citizenship can also affect your plan.
If you’re moving abroad, either permanently or temporarily, it is important to know how your life insurance will be affected. Communicate openly with your provider in order to secure the best coverage possible and protect the ones you love in case of emergency.
