Be Careful About Your Western Life Insurance Policy

[TheJoker12]

i have been trying to get term life insurance and telling them that i live in thailand, the few companies who have been willing to insure me would not do term insurance, only universal life insurance which is not the policy you want to have as just a scam. this makes me think that many of you are paying for policies your loved ones will never be able to collect on when its discovered you live here full time.

Edited February 27, 2010 by TheJoker12

[TheJoker12]

so funny how sin sot thread or virginity thread gets 900 replies but an important thread like this is completely disregarded.

[Chaimai]

What makes you think they will check where you live. This is not Big Brother and unless you have a £1m policy the insurance company will not give a flying fart.

If you want your Thai teerak to have a little comfort when you are gone, get insurance for £20k and have it written in trust for her.

You have to agree that virginity is somewhat more interseting than a non-issue on insurance

[473geo]

so funny how sin sot thread or virginity thread gets 900 replies but an important thread like this is completely disregarded.

Perhaps if you would explain in more detail?

What do you see as a term policy?

Are you alluding to the clauses which negate the contract if you do not domicile in your insurance 'host' country for a minimum period?

Explain the universal policy and why you say this is a scam?

no point in talking in riddles....you're the joker... .

[7by7]

To call one particular type of insurance policy a 'scam' shows a lamentable misunderstanding of the business. There are various types of policy, and one should choose a policy that suits one's individual needs. Of course, there are unscrupulous sales people who will sell one the wrong type of policy, but this is not the fault of the policy itself. As in any major purchase, one should seek independent advice if possible and shop around.

As far as the UK is concerned, there are complications involved in a UK company insuring the life of a non-UK resident, not least tax. See Foreign Residency Sales Guidelines from Legal & General. (I am not endorsing this particular company, merely using their guidelines as an example. Other insurance companies are available.)

I imagine the situation is pretty similar in other countries.

If you are resident in Thailand, you would probably find it simpler to obtain cover from a company in Thailand, rather than your home country.

so funny how sin sot thread or virginity thread gets 900 replies but an important thread like this is completely disregarded.

Did you post to inform members; or merely to seek some sort of attention?

Some threads are controversial and generate a lot of replies. Others are more informational and do not generate so many replies.

At the time of writing this topic's had 90 views. Not bad, considering it's Saturday night and most member's probably have better things to do than sit at their computers!

I'm moving it to the Insurance in Thailand forum, where it may get more responses.

[noise]

What makes you think they will check where you live. .....

When I investigated multiple companies in the U.S. for term life insurance (which I am still carrying here), they all wanted the minimal physical and blood tests (to make sure I was not getting insurance after getting a terminal diagnosis from a doctor?). Yes, they did have the pre-condition clause so they were covered, but...... They sent their technician to the house for the short exam and drawing blood.

So that may be part of the reason they will not pick you up there while you live here. You are an unknown and they do not feel they can get a reliable enough picture of your current health to take the risk. And the effect of living in Thailand may not be factored into their actuarial tables?

Just some WAGs so you get another response.

Edited February 28, 2010 by noise

[SantiSuk]

While on the subject of the validity of insurance products while you are in Thailand, check your home and contents policy if you are still insuring your home in the UK (may apply to other nations). If you are away from your UK home more than 60 days, your insurance policy may not cover you - if the claim event happens after 60 days but before you get back.

Do you fancy losing your home with no compensation when it burns down after 60 days and before you return? Thought not. Get a friend or family member to occupy it for a day or two (and ask them to talk to the neighbours, for subsequent verification) if you want to stay longer.

As a variant to that theme, I was recently candid with my insurer (Prudential), that I am away for less than 60 days at a time but only spend an aggregated 2 months in the home. The underwriter was consulted and Pru said they would honour the present term but would not renew next year, as their policy was 'not really designed' for habitual stay-aways. I think that is code for the fact that their policy exclusions do not actually exclude such an occupation pattern. Other insurers who are more used to insuring vacant properties can provide cover (much cheaper than the Pru!!).

[ThaivisaInsurance]

May we suggest contacting Thai Visa Brokers for Term Life insurance quotation ?

[jfchandler]

That's an interesting subject about the need for a medical checkup, as you state below, re a new life insurance policy. And sure, a U.S. insurer isn't going to be sending their med tech to Thailand to draw blood.

I wonder how the situation would fare for someone who is living in Thailand, but travels back to their home country periodically, enough so that they could schedule their checkup appointment during the duration of one of their return visits. Of course, that would also require a residence address, which likewise could be arranged.

But the unknown question for me is then... let's assume the policy has been issued along those lines, if the insured subsequently moves out of the U.S. to another country like Thailand, is that U.S.-based life policy still then in effect or do they have terms that somehow cancel or phase them out if the insured no longer is residing in the U.S.???

What makes you think they will check where you live. .....

When I investigated multiple companies in the U.S. for term life insurance (which I am still carrying here), they all wanted the minimal physical and blood tests (to make sure I was not getting insurance after getting a terminal diagnosis from a doctor?). Yes, they did have the pre-condition clause so they were covered, but...... They sent their technician to the house for the short exam and drawing blood.

So that may be part of the reason they will not pick you up there while you live here. You are an unknown and they do not feel they can get a reliable enough picture of your current health to take the risk. And the effect of living in Thailand may not be factored into their actuarial tables?

Just some WAGs so you get another response.

[Mike45]

Thats a great question. Before I left the USA I was considering getting a term life policy from Savings Bank Life Insurance. I decided not to get it because I just can't believe that they will pay out after years of collecting premiums when they see a death certificate from Thailand.

That's an interesting subject about the need for a medical checkup, as you state below, re a new life insurance policy. And sure, a U.S. insurer isn't going to be sending their med tech to Thailand to draw blood.

I wonder how the situation would fare for someone who is living in Thailand, but travels back to their home country periodically, enough so that they could schedule their checkup appointment during the duration of one of their return visits. Of course, that would also require a residence address, which likewise could be arranged.

But the unknown question for me is then... let's assume the policy has been issued along those lines, if the insured subsequently moves out of the U.S. to another country like Thailand, is that U.S.-based life policy still then in effect or do they have terms that somehow cancel or phase them out if the insured no longer is residing in the U.S.???

What makes you think they will check where you live. .....

When I investigated multiple companies in the U.S. for term life insurance (which I am still carrying here), they all wanted the minimal physical and blood tests (to make sure I was not getting insurance after getting a terminal diagnosis from a doctor?). Yes, they did have the pre-condition clause so they were covered, but...... They sent their technician to the house for the short exam and drawing blood.

So that may be part of the reason they will not pick you up there while you live here. You are an unknown and they do not feel they can get a reliable enough picture of your current health to take the risk. And the effect of living in Thailand may not be factored into their actuarial tables?

Just some WAGs so you get another response.

[mark5335]

I took out a term life policy in Bangkok last year without any problems, from Friends Provident.

I did the usual medical tests at an approved doctor, and pay my monthly premium by my Thai credit card. I'm required to update the insurer if I move, change jobs, new medical conditions etc.

[jazzbo]

You might also check out 'accidental death' policies offered here in Thailand -- application is easy and the ratio of payout vs. premium for any covered 'event' is much higher than with life insurance e.g. 1 million baht coverage for about 3000 baht per year.

[chiangmaibruce]

OP doesn't say where he is from. I got life insurance in Australia. Some policies will not cover you outside the country, some will cover you for a limited period of time (which varies, say 2-6 months), and others (like the one I got) don't have a problem if you stay away long time. This is just something you need to check and double-check.

Thailand is not necessarily cheaper to get life insurance, in fact the policy I was quoted here was substantially more costly as it was packaged as an investment product (ie. at some stage you get money back) ... this is not a popular product now in western countries ... excepting amongst Australians of Chinese descent for example. I definitely don't agree with the notion of taking a chance and ignoring the residency requirements. Insurance companies can be a bit slack with offering policies (for e.g. with regard to possible pre-existing health issues) .... I mean why refuse years of premiums? ... but I can assure that they get really efficient at around pay-out time

[cardholder]

There are a number of people with life policies taken out in England and they are now living overseas.

Had no problem getting a payout for a Thai widow who's husband had lived in Thailand for 5 years.

I believe that there is a question on life insurance proposal forms along the lines of "Do you intend to reside for more than 3/6 months outside the UK". It may well NOT be your intention at the outset of the policy but your situation changes a few years later.

Different to travel policies where the bulk only cover up to 30 days. No problem getting longer cover, the premiums are just higher.

[snowgard]

I've for my family and me term life insurance and accident insurance from Germany and they full accepted our moving to Thailand 2.5 years ago. They have our Thai-Address and we got a yearly upstocking letter with snake-mail.

In the insurance term they write, that they have a worldwide acception.

[geriatrickid]

Perhaps it would be useful to provide an explanation of why there restrictions on residency on some life insurance contracts. My understanding is that it is quite legitimate and logical.

Life insurance relies on actuarial tables. These tables incorporate life expectancy and risk likelihoods. Now we all know that countries have some unique charaqcteristics when it comes to morbidity and mortality rates. For example, a leading cause of death in Thailand is infectious disease, whereas in Belgium it is not. Life expectancy varies from country to country as well. All of these characteristics are incorporated into the rating of the policy. Basically, if an insurer's client base is Denmark it will underwrite and rate to reflect that market. Yes, people move about and the better policies will not discriminate on that, either in the contract language or after a period of time.

Some aspects to keep in mind are that a life insurance policy is basically a bet where the insurer gambles the policy holder lives and the policy holder bets that he will die. After all, there is no payout unless you are dead. Actuarial tables are fairly similar between reputable insurers. That means that the basic rates charged are going to be similar between any number of the large reputable life insurers. The premium is influenced in one of two ways;

i) A life insurer is able to invest the premium paid to deliver a better ROI than its competitor. A better ROI means that the insurer migth be able to charge a lower premium. However, ROIs for most reputable insurers are similar because they are subject to similar regulatory regimes that spell out the investments a life insurer is allowed to hold. Major life insurers like Zurich, Allianz and AXA all took hits because their real estate investments vaporized. If one looks at the results, their returns were just as crappy as the other. Some companies place higher risk investments (e.g. AIG) in the hopes of better ROIs. This lets them charge a lower premium The end result is that the company needed a bail out. Remember, the whole idea of life insurance is that it is there to pay when you are gone.

ii) The key differentiating factor? Market and sales practice. Bet some of you didn't know that the commission on the 1st year of a multi year policy can be 100% with some insurers. That means the entire premium is paid as commission to the agent. Some companies use lower commission structures. As a policy holder, you are entitled to know the commission paid on the policy. If the agent is honest, he or she will not hesitate in declaring the commission and explaining why he or she is entitled to it. If a person is going to service a 10 year policy, then you bet he or she is entitled to be paid. However, a great many agents are independent sales people and will flip policies between carriers. it is called churning. Asking about the commiussion discourages churning. part of the rating structure takes into account legal jurisdictions. In the UK, the rules are stricter and you can't screw around in the same way that one can do in Asian markets. There is a more level playing field.

ii) Contract Language: A more restrictive policy, i.e. one that excludes foreign locales, will usually be priced lower. Read the contract.

So what does this all mean? A lower priced policy may not necessarily be the best policy because the carrier may be relying on its investment portfolio to help keep the premium lower, or it may not compensate its sales reps properly, which means less service and more importantly it may mean a more restrictive contract.

Not that paying a big premium means that one gets a better product, but chances are that an Allianz, Prudential, Manulife, Generali policy has been properly rated and will not exclude Thailand whereas, the significantly lower cost ScrewULifeCo policy will have all sorts restrictions.

Edited July 8, 2010 by geriatrickid

[cardholder]

So what does this all mean? A lower priced policy may not necessarily be the best policy because the carrier may be relying on its investment portfolio to help keep the premium lower, or it may not compensate its sales reps properly, which means less service and more importantly it may mean a more restrictive contract.

Not that paying a big premium means that one gets a better product, but chances are that an Allianz, Prudential, Manulife, Generali policy has been properly rated and will not exclude Thailand whereas, the significantly lower cost ScrewULifeCo policy will have all sorts restrictions.

An excellent explanation - thank you.

As with many things, price is not always the main consideration. It is important that a policy holder can have confidence that a future claim will be paid without 'wriggling'.

I do think that industrty brings 'churning' on itself - partly by pricing structure and partly by remuneration/target structures for sales-people.

[Mercury]

Life assurance, at least under UK law, only relates to current or known event at the time the contract is enacted. Thus, suicide more than 12 months from the start of the policy will trigger a payout as it is assumed that a reasonable person could not really restrain themselves from committing suicide for 12 months or more to deliberately force a claim. Using that logic as an outside example, it would be rational to assume that whilst you would have to tell them if you intended to move to Thailand the following week, any potential plans more than 12 months into the future need not be declared. IN fact, if you retained a job in the UK and property, then it could be argued that you had no intention to move overseas.

[FRM-BKK]

There are a number of people with life policies taken out in England and they are now living overseas.

I have been communicating with my insurers (Aviva) in the UK, regarding my current life-policy, which has been running for 8 years. I decided to inform them, as I now live in Thailand permanently. My policy exclusions stated that if the 'insured' lives abroad, the policy would be rendered invalid.

Aviva was happy to continue cover and noted my new address in Thailand.

The only rule they have pointed out to me is that premiums must be paid from a UK bank account.

Frm-Bkk