UK life companies have pulled back so much from offering cover to expatriates that Britons living abroad can only get quotes from 16 per cent of the market.
According to the latest expatriate insurance survey from specialist mortgage and insurance firm Unusual Risks, this is a marked reduction from 2015, when 33 per cent of life companies offered life insurance products to British citizens living abroad.
Over the past few years, major names in the insurance sector have withdrawn from offering cover to expatriates.
Of those who remain in the market, only 8 per cent are prepared to accept an application for critical illness cover and only in limited circumstances.
Chris Morgan, financial adviser, called this a “major problem” for British expatriates living abroad, especially as international companies offer expensive annual renewable and reviewable premium products.
He said: “There has been a shift in the availability for life insurance products for British expats. The majority of mainstream UK insurers have all withdrawn from offering this type of cover.
“British expats will have genuine reasons for needing a UK-based life assurance plan, for example if they have property interests, outstanding mortgages or tax interest in the UK.
“We have also met expatriates who require life assurance to protect family members and children who are still resident in the UK.”
To help advisers with expatriate clients, Unusual Risks has launched a new fee-based service to enable them to find life insurance cover from within the UK.
According to Mr Morgan, because this service will be offered to advisers on a fee basis, purely for getting insurance for expatriate clients, there will be no cross-selling against any other products and services.
Unusual Risks will help advisers to arrange level term assurance with “reputable” UK insurers, and source the best quotations, Mr Morgan explained.
He said: “There are many financial industry professionals who rarely offer expatriate protection services to their clients, as many are specialists in mortgae, pension and investment planning.
“For them to conduct specific research on protection for their British expatriates would be time consuming and inefficient.”
Earlier this year, Emma Thomson, life office relations director for Lifesearch, said it was not only the fact life offices have withdrawn from offering expatriate cover, but also tax rules in the UK and regulation in Europe had made it more difficult.
There is also an issue with people falling ill abroad, according to Saga Travel Insurance. According to the specialist provider, one in four people aged 50 and above have fallen ill abroad and one in 10 of these do not have travel insurance, potentially leaving many facing a big medical bill.