Health, income & life protection: a short guide

This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, it is subject to change and we are not responsible for any errors or omissions.

Do you have a financial safety net ready in case of emergencies? As an expat, the need for a financial protection plan can be even more urgent due to the nature of spending considerable time abroad. What if you need to fly home quickly for a family emergency?

What if a serious illness or accident leaves you unable to work and earn money for a significant period? Perhaps your host country and/or local employer is not as generous, say, with sick pay and benefits compared to those in the UK and elsewhere.

Below, our Murcia financial advisers at Scottsdale highlight three key areas of financial protection which can be relevant for British expats: health insurance, income protection and life insurance. We discuss their potential utility, drawbacks and unique features which could bear upon an expat’s decision(s) about financial protection.

We hope these insights are useful to you. If you want to discuss your financial plan with a member of our team in Murcia, please get in touch to arrange a no-obligation financial consultation, at our expense:

+34 966 460 407

Health insurance

When living abroad it is vital to ensure you have ready access to high-quality healthcare in case of medical emergency. Moreover, you want peace of mind that any bills will be covered quickly and comprehensively. Indeed, unforeseen medical fees have been known to bankrupt expats suddenly. Make sure you close that possibility for yourself.

Health insurance can be a great option for British expats. Here in Spain, for instance, British nationals have access to the same basic state services (including healthcare) as Spaniards. However, many expats prefer to have health cover to enable access to private clinics and services – often allowing for more choice, English-speaking services and more specialisation.

There are many options for British expats considering private health insurance in Spain. However, be careful to consider the range of conditions you wish to cover and the premium (and excess) costs. A financial adviser can help you survey the insurance market more thoroughly and find the best, cost-effective solutions for your needs.

Income protection

How will you continue to fund your lifestyle if you suddenly find yourself unable to work while living abroad – e.g. due to an accident or injury? In Spain, it may be possible to claim a state allowance for temporary incapacity. However, this may not last for as long as you need or cover your full range of expenses.

Income protection can provide a much-needed financial “safety net” for those wanting to ensure a sufficient replacement income in such a scenario. The cost of the premiums will vary depending on unique factors such as your health, family history, desired replacement income and how long you want it for.

An alternative to income protection is critical illness cover. Here, the policy typically provides a single lump sum payment if you are diagnosed with a specific condition (e.g. a heart attack). This can be useful for expats who anticipate large expenses – such as relocation costs – if they suddenly become incapacitated abroad.

Life cover

This is the most well-known type of financial protection. Yet it is highly underutilised by British people. Only 35% of the UK adult population is covered for premature death. For expats, we can reasonably expect that the percentage will be lower due to the added complexities of finding suitable cover abroad.

Fortunately, with professional advice, it does not need to be difficult to find a valuable policy which covers expats in places like Spain. This allows for a lump sum to be paid to your loved one(s) if you die during the policy terms.

Life assurance will cover an expat for life (typically resulting in higher premiums) whilst life insurance usually covers a specific period – e.g. 20 years.

Be careful with integration

It is vital to ensure that any financial protection you take out as an expat integrates appropriately into your wider financial plan. For instance, if you opt for life insurance, how might the potential payout affect your inheritance tax (IHT) bill in the future?

In the UK, one way to help ensure that all of the policy proceeds go to your loved ones – not the taxman – is to write the policy into a suitable trust. However, an expat needs to consider how local tax laws might play a role in eroding a potential payout. For peace of mind, we recommend speaking with an experienced financial adviser who has a strong knowledge of your host country’s local tax landscape.


We hope these summaries of different financial protection options have inspired ideas for yourself as a British expat. Although we all assume that the worst will never happen to us, we will thank ourselves later for being prepared if we do, unfortunately, fall victim.

If you are interested in discussing your own financial plan or inheritance tax strategy with us, please get in touch to arrange a no-commitment financial consultation at our expense:

+34 966 460 407

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