Why Do Expats Need Insurance?
Transcription of interview with David Tompkins on July 16, 2012.
Douglas Goldstein, CFPÆ, Financial Planner & Investment Advisor
David Tompkins is the president of TFG Global Insurance Solutions.
He operates the expatriate division, called Expat Financial.
Douglas Goldstein, financial planner & investment advisor, interviewed Tompkins on Arutz Sheva
Radio.
Douglas Goldstein: What is Expat Financial all about?
David Tompkins: Expat Financial is a portal for clients that live abroad who need international
life, disability, travel, health insurance as well as special risk insurance to basically
view the products that we offer and services and contact us for a quote, or with some plans,
they can even purchase right online.
Douglas Goldstein: Whatís the difference between a domestic person, a person who has
not yet left his country and an expatriate?
David Tompkins: An expatriate would be someone who is living in a country where they donít
have citizenship.
Someone might be from United States living in the United Kingdom, or someone from Israel
who is living in France for example.
Douglas Goldstein: From an insurance standpoint, donít these people have the same needs as
everyone else?
David Tompkins: They are generally unable to get domestic insurance because theyíre
an expat and because theyíre not a local national, or they donít want to get it.
So they canít join the national health system, for example, because they are there for just
a temporary period of time or itís just not available.
They could even be living in a country where there is no real national health system or
services, so they need international health insurance.
Douglas Goldstein: Letís differentiate between the two.
You said that either they canít get it or they donít want to get insurance from their
home country.
Why would it be that they canít get it?
I do know that a lot of policies say ìNot available to U.S. citizens.î Why would an
insurance company not want to cover a U.S. citizen living outside of United States?
David Tompkins: Generally, it could be for a regulatory reason or they just have a rule
that they just cover their own local nationals.
Theyíre really not set up or desirable for an expatriate, because expatriates could be
very mobile and the place that they are living in as an expat may not have very desirable
coverage or may not allow them to be insured for whatever regulatory or administrative
reason.
Douglas Goldstein: Letís talk about term life insurance.
When someone lives outside the United States, people like that simply cannot go online like
someone in New York can and get a quote for a term life policy.
Do you think thatís all regulatory or you think that the insurance companies have something
else in mind?
David Tompkins: Wherever that expat might be in other countries, it could be regulatory
or it could be theyíre just not set up to cover people that are not a local national.
A lot of times, itís just not available, so depending on the country that theyíre
in and the citizenship, we can either source some term life coverage for them, usually
like up to 10 years, or we have associates that we can refer people to that might be
able to source that coverage for them depending on their citizenship or where theyíre located.
It really depends.
Douglas Goldstein: When people are buying offshore policies, do these policies tend
to be more expensive than a parallel policy theyíd find in the United States or in Canada
where you were?
David Tompkins: Expat policies for life insurance or disability insurance are generally quite
a bit more expensive than a domestic policy.
Thereís not a lot of choice in carriers that will do it.
Thereís very little, so thatís a big thing.
If someone is living abroad, the risks are usually a little higher depending on which
country theyíre in.
Some of the expat life insurers will have the list of countries that they canít offer
coverage to and then they will also have a list of countries where they might have an
extra premium loading, but a lot of that has to do with choice, logistics, and that type
of thing.
Douglas Goldstein: Do you think that the offshore companies that are covering people are solid
as the U.S. companies that theyíre familiar with in the States?
David Tompkins: Generally, theyíre quite solid.
A lot of the companies could be like Lloydís of London, which are very well-known as secure
or could be someone like a Friends Provident International, which is basically an international
arm of a large domestic carrier located in the U.K. or it could be other divisions, but
thatís one thing if youíre looking for life insurance and youíre an expat and you want
something thatís secure.
I know there are some expats on the U.S. side will sometimes go back to the U.S. and get
some term life coverage.
There are a few carriers that will do that.
Itís not something that we can arrange, but we can certainly refer people to brokers in
the U.S. that might be able to help them with that.
Douglas Goldstein: A lot of times, people do all sorts of kind of unusual traveling.
They go backpacking in Colombia, where kidnapping seems to be a very big issue, or theyíll
end up in a war zone like Syria.
Are these people able to get any sort of insurance?
David Tompkins: Yes, it is possible.
If theyíre going somewhere really dangerous and theyíre looking for term life coverage
for an expat, they probably have some major difficulty getting the coverage.
We have insured a lot of people who are going to Iraq and Afghanistan and other high-risk
areas, and they will generally look at a Lloydís of London-type carrier and it would usually
be an accidental death or dismemberment, and they would have a writer that would cover
acts of war, terrorism, and that type of thing.
Douglas Goldstein: Do you think that for people who are permanently leaving their homeland,
itís important for them to have an insurance coverage in their new local area?
Letís say someone lives in the United States and moves to Israel, and heís planning to
stay in Israel, is it worth it to him to try and keep his U.S. coverage or should he just
go with the local policies in Israel?
David Tompkins: If he or she has left the U.S. going to Israel, I think it would probably
be a good idea if they can keep their U.S. coverage, especially if it was bought at a
younger age.
Theyíd have to check with their supplier in the United States whether they can continue
the coverage, but if itís a good solid policy, they should be able to.
If they can get good local term coverage in Israel, thatís probably a good idea, as well,
to see if they can keep the U.S. and get some additional coverage in Israel.
I canít come any further than that.
Douglas Goldstein: If a person is traveling around and he is subject to various jurisdictions,
in terms of not only income tax, but estate tax and death tax, are there international
policies that can be used to help deal with that problem?
David Tompkins: You can either obtain a term life coverage to do that, but getting a permanent
insurance for expats is very difficult.
Thereís not a lot out there.
Douglas Goldstein: By permanent, you mean with some sort of savings component involved,
or just permanent that is long term?
David Tompkins: For permanent long term, like for lifetime coverage, especially if thereís
a savings component, my experience has been extremely difficult or impossible to obtain
that, and especially for U.S. citizens.
Iím not sure exactly why, but that could be to do with either regulatory or tax reasons,
but again mostly what Iíve seen on the expat side is primarily termed coverage, usually
10, 20, 30 years, but again it depends on really the citizenship of the expat and where
theyíre located whether itís even possible to get coverage as well as what the cost is.
Douglas Goldstein: As a financial adviser, many of my clients were born in the States
and retired to Israel, and they need some sort of coverage in terms of their insurance.
They either keep it from America, like you said before, but when it gets to be a little
more sophisticated, they cannot get those U.S. policies.
Before, you mentioned companies like Lloyds of London.
Are these companies working in most of the world?
Do they even care where you are or would they perhaps give you a problem if youíre living
in Israel?
David Tompkins: I donít have any clients in Israel at the moment, but most of my clients
are all over the world, but Iím not presently in Israel.
My understanding is that each insurer will have different requirements of where they
can insure an expat or where they canít.
It really depends on the case.
Douglas Goldstein: How can people follow your work and follow you?
David Tompkins: They can reach us on our website www.expatfinancial.com.
We have different policies online there, as well as contact us if you have a unique situation
which they need insurance for, like international, health, life, disability and also travel insurance
as well.
Douglas Goldstein, CFPÆ, is the director of Profile Investment Services and the host
of the Goldstein on Gelt radio show (Monday nights at 7:00 PM on www.israelnationalradio.com.
He is a licensed financial professional both in the U.S. and Israel.
Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, NFA,
SIFMA.
Accounts carried by National Financial Services LLC.
Member NYSE/SIPC, a Fidelity Investments company.
His book Building Wealth in Israel is available in bookstores, on the web, or can be ordered
at: www.profile-financial.com (02) 624-2788 or (03) 524-0942.
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