Is my life insurance valid on holiday?
The summer holidays are upon us and millions of Brits are about to jet off to warmer climes, with Spain, Italy and Portugal at the top of our destination list, according to latest travel research.
In our excitement to pack the sun cream and flip flops, however, not all of us stop to think about our safety overseas. Figures from travel body ABTA reveal that two thirds of Brits travelling abroad this summer haven’t bought travel insurance yet, with some saying they don’t need it or that it’s a ‘risk they are willing to take.’
Even fewer of us consider whether our protection insurances are valid or ask ourselves questions such as ‘will my life insurance be valid abroad?’ But, before you pack your passport and ask a friend to feed the cat, it’s worth taking five minutes to consider what might happen in an emergency.
What is life insurance?
Life insurance provides a lump sum to your family or dependents should you pass away, with the amount paid depending on the type of policy you take out and the monthly premiums you pay. Life cover can be vital in the aftermath of your death, allowing your loved ones to pay off the mortgage and stay in the family home or taking care of the bills while they have some breathing space away from work.
If you’re not the main earner or you stay at home to raise your children, you might assume life insurance isn’t needed. However, it’s wise to think about how your partner might cope in the event of your death, particularly if he or she has to leave their job to look after things at home. Last year, research from Scottish Widows showed that 60% of mums are failing to protect themselves financially, potentially putting their families at risk.
Will my life cover be valid while I’m on holiday?
The good news is that most standard life insurance policies will cover you for travel to countries deemed ‘safe’ or low risk by the UK government, such as those in the EU, North America and Asia. Visit the foreign travel advice pages for up-to-date information on the area you are planning to visit. Note that if you travel to a country against government advice, any insurance - including life cover and travel insurance - is likely to be invalid.
If you’re planning to take part in extreme sports or hazardous activities - such as rock climbing, scuba diving, bungee jumping or skydiving - on your holiday, it’s essential that you tell your life insurance provider.
When you initially take out a life policy, you will usually be asked whether you participate in these kind of activities ‘regularly’. If the answer is yes, some insurers might not insure you, while others will offer cover but might increase the premium. Attending professional training courses or having the relevant safety certificates can help keep the premium as low as possible. If the activity is a one-off during your holiday, many providers will accept the risk - but it’s wise to check before jetting off.
Is my life insurance valid if I work abroad?
If you’re one of the many Brits who live and work abroad, either permanently or for part of the year, make sure you look at the features and benefits of different policies when comparing life insurance. The good news is that the vast majority of policies will cover you in this scenario; according to financial information business Defaqto, just 17 out of 117 level term assurance policies have exclusions to some benefits for UK ex-pats*. Similarly, overseas nationals coming to live in the UK are covered by most policies, with 110 out of 117 policies available to them.
If you live or work abroad, you might also want to look into international health insurance. It’s not the same as travel insurance and will provide private healthcare for you and your family in the absence of NHS healthcare.
If you’re a young person or the parent of a young adult going abroad this summer, check out this holiday safety advice from ABTA, with tips on looking out for friends and taking care on balconies. You might also want to check if your health insurance is valid on holiday - ensuring you’ll be covered with more than just the suncream!
* Data sourced on 26 July 2019.