Happy New Year to each and every member of this amazing group!!! With the new year in full swing, January is usually a time where people try to get all of their ducks in a row as to speak. One of the most common new years resolutions (apart from losing the Christmas weight) is to address their Financial Planning (Life Cover, Dread Disease and long-term Income Protection.
To the new members and to the ones that have not yet got round to reading this. I posted this information towards the beginning of last year and these points are still extremely important to address.
Many of my clients arrive in Ireland with life insurance already in place with an insurance provider from home (South Africa). In many cases, they’ve had the cover for years.
When I’m working out a financial plan for any of my clients, it’s important for me to know what they currently have in place and see how it fits into their overall financial plan now that they are living in Ireland.
So recently, I did some research to compare South African life insurance policies with the policies available in Ireland.
My research by it’s nature was a little limited but I ran multiple quotes on the comparison websites, read through 100’s of pages of terms and conditions from various insurers (not just the marketing materials) and read the small print.
Obviously, I didn’t get to compare all the possible policies on the market, but here’s the 6 things you really need to know:
1.Your policy may not be valid if you live outside of South Africa.
In the terms and conditions in some of the policy documents, it stated that you had to be resident in South Africa and that if you live outside South Africa for more than three months in any 12 month period, you must contact the insurer immediately.
While you may have good cover at home, it’s important to let your insurer know you’ve moved overseas and find out if the policy would pay out in the event of a claim. If you don’t inform them, a claim may end up being invalid as informing them is a clear condition of the contract (in at least some of the policies I reviewed).
2. What happens if you make a successful claim on a policy in South Africa?
If your policy conditions allow you to live overseas and maintain cover, there are two major concerns I would have:
Firstly, when you are living in a different country, what are the practicalities of a claim. Who will look after the claim? How easy will it be when you or your partner are thousands of miles away? What evidence will they require? How long will it take? And while it might be challenging for life insurance claims, I can only imagine how difficult it could be to get a dread disease claim paid out quickly.
Secondly, if a claim is made on a South African policy, how easy will it be to bring the proceeds into Ireland? Obviously, there are limits to the funds you can bring out of South Africa annually. If you had a serious illness and needed the claim proceeds to help with your recovery, having some or all of the money tied up in South Africa wouldn’t be ideal.
3. Initial premiums are much cheaper in Ireland.
I expected life insurance would be cheaper in Ireland, as the life expectancy is higher in Ireland than in South Africa. However, the difference in price was truly staggering. The quotes in South Africa were about twice the price of those in Ireland in many cases. The price differences varied depending on age and smoker status but in each case, the South African policies were much more expensive.
4.Are your premiums locked in do they increase every year or every few years?
In Ireland, term life insurance prices are locked in from the start, unless you want your benefits to increase each year.
On the South African comparison sites, price increases varied depending on the provider. They were typically in the range of 5%-7% per annum.
The initial premiums tend to be much higher in South Africa anyway.
But what shocked me was that by the end of the policy, the premiums in the quotes I received would be about 7 times more expensive than the equivalent policy in Ireland.
5. Specified Serious Illness Cover in Ireland is much more comprehensive than Dread Disease Cover in South Africa.
While policies in both countries cover the ‘Big 3’ medical conditions (Heart Attack, Stroke & Cancer), when it comes to other medical conditions, the Irish policies are much more comprehensive than the South African ones. Irish policies cover 85 to 103 Serious Illnesses versus 16 to 40 Serious Illnesses covered on the South African policies that I’ve seen.
6. Your cover may have been sufficient in South Africa but is it enoughin Ireland?
Do you have the right amount of life cover and dreads disease cover now you are living in a country that costs more to raise a family? While the cover you had at home may have been sufficient, both the higher cost of living and higher income levels in Ireland makes it likely that the level of cover you had at home won’t be sufficient for your needs now that you have moved to Ireland.
If you would like my help ensuring that you and your family are sufficiently protected, please contact me on the details below or Private Message me on Facebook. I look forward to helping in any way possible going forward.
Kind Regards,
Danny Coad QFA
Tel: 0862422441
Tel: 00353862422441 (If contacting from abroad)
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.
