Life Insurance for British Expats: Types, Eligibility, and Key Considerations

Given the wide range of available options, selecting the most suitable life insurance as an expat requires careful consideration of multiple factors, including residency status, insurable interest in the UK, and the portability of cover across borders.

This article provides UK expat–focused guidance on identifying insurers and policies that offer suitable protection, regulatory certainty, and flexibility to support your relocation plans and long-term financial objectives.

What Is UK Expat Life Insurance?

Life Insurance for British expats refers to a policy designed to accommodate the unique needs of UK nationals who are living or working outside the United Kingdom. It is typically not sold as a standalone “expat” product but rather arranged through one of the following three structures:

• A UK-domiciled policy with limited cross-border coverage, usually available only while you retain UK residency or strong UK financial ties.
• A local policy obtained in your new country of residence that meets local regulatory and tax requirements.
• An international (offshore) life insurance policy issued by an insurer regulated in a jurisdiction such as the Isle of Man, Guernsey, Luxembourg, or Gibraltar, offering multi-currency and global coverage for expatriates.

The primary purpose of any life-insurance policy is to provide financial protection for your dependants in the event of death. Upon the policyholder’s passing, the beneficiaries may claim a death-benefit payout to help maintain their standard of living and repay outstanding financial liabilities such as mortgages or personal loans.

Some international or whole-of-life arrangements also include an investment or savings component, which can contribute to long-term wealth accumulation and estate planning objectives.

These policies are generally more complex and may carry higher charges, currency risk, and jurisdiction-specific tax implications, requiring careful financial planning and advice from an adviser familiar with cross-border taxation and offshore regulation.

What Are the Primary Types of British Expat Life Insurance?

Although there are various specific types of life insurance suitable for expats, most of them fall into two general categories:

1. Term life insurance
2. Whole-of-life (permanent) insurance

Term Life Insurance

Term life insurance provides coverage for a specific period (“term”), which makes it suitable for expats who plan to return to the UK within a defined timeframe and wish to ensure their family’s financial stability while abroad.

In the event of the policyholder’s death during the term, their dependants may claim the death benefit. If the policyholder outlives the policy’s term, all coverage ends with no payouts or premium refunds.

A term life insurance policy does not have a cash value, nor does it contain any savings or investment components. It is the most straightforward form of insurance, used almost exclusively for protection in scenarios such as:

• Expectations of notable life events during the term (e.g. birth of a new child).
• Securing mortgage repayment in the event of death while abroad.
• Covering funeral or repatriation costs upon the policyholder’s death.

For British expats, it is essential to check whether the term policy continues to provide cover if you change country of residence or remain overseas for longer than originally declared. Some UK-domiciled insurers restrict cover once permanent non-residency is established.

Your individual financial objectives should inform the specific features of your term policy. A key consideration is how the level of coverage evolves as the term progresses. Generally, you may choose from three options:

Whole Life Insurance

Whole-of-life insurance is a form of permanent coverage that remains in force for the lifetime of the insured, provided premiums are maintained. As such, it can appeal to expats who do not intend to repatriate or those who expect to relocate several times throughout their lives, as it offers continuous protection across jurisdictions, subject to the insurer’s country-exclusion list.

Whole-life policies typically contain a savings or investment component and a cash value, which means:

• They can be utilised as long-term wealth-building instruments.
• You may borrow against the policy (usually through policy loans).
• The death benefit may grow over time and be used for estate-planning purposes.

As premiums are paid, the insurer invests a portion—normally in a conservative, regulated investment portfolio—with the goal of delivering stable, but not guaranteed, growth of the policy’s cash value.

Because of this investment element, whole-of-life insurance is generally more expensive than term insurance for the equivalent sum assured. However, it can support cross-border estate planning, particularly when structured through a trust or written under offshore jurisdiction law.

In contrast to term life insurance, most whole-life policies do not have options for increasing or decreasing premiums. The premiums remain fixed for the entire duration of the policy, although you may encounter options such as:

• Limited-payment insurance: Premiums are paid for a set period (e.g., 20 years) but coverage remains lifelong.
• Single-premium insurance: You can pay a one-off lump sum to obtain permanent coverage, though this may have tax or liquidity implications that should be reviewed with a qualified adviser.

Who Is Eligible for Expat Life Insurance?

The possibility of obtaining life insurance while living abroad and the specific form of cover you may qualify for primarily depends on four key factors:

1. UK residency status.
2. Destination country.
3. Personal factors.
4. Length of stay abroad.

UK Residency Status

Your residency status determines the type of expat life insurance you can obtain. If you are still considered a UK resident for insurance purposes despite living overseas temporarily, you may apply for UK-domiciled policies that include limited international coverage. Otherwise, you will generally need to explore international life-insurance products or locally regulated policies in your country of residence.

Residency requirements differ by insurer, although many reference the number of days spent in the UK within the previous tax year. While some insurers use 183 days as a guideline for UK residency, there is no universal threshold, and definitions vary between providers. Always confirm the precise criteria with your insurer before applying.

Obtaining a UK-domiciled policy as a non-resident is sometimes possible but may be complex. You must demonstrate a clear insurable interest in the UK, which can include:

• Ownership of UK property or an outstanding mortgage.
• Financial dependants residing in the UK.
• Ownership or directorship of a UK-registered business.

Providing evidence of insurable interest can involve significant administration, and you may also be expected to maintain ongoing UK financial connections such as a sterling bank account or a UK correspondence address.

Due to the complexity of arranging domestic cover as a non-resident, many British expats opt instead for international insurance, which typically offers greater portability and fewer restrictions based on residency, although such policies may fall outside UK regulatory protection and the Financial Services Compensation Scheme (FSCS).

Country of Residence

UK life insurance policies that extend cover internationally may impose residency or country exclusions. Accordingly, your current or intended country of residence can affect both eligibility and premium cost.

Dedicated expat-oriented insurers may be more flexible, but standard exclusions often apply to:

• Countries engaged in armed conflict.
• Regions with significant political instability.
• Jurisdictions subject to international sanctions or with limited medical infrastructure.

Instead of outright exclusion, insurers may apply premium loadings for higher-risk destinations. Discuss all relevant terms with your insurer before taking out a policy, and be transparent about both your current residence and any expected relocations.

Personal Factors

Regardless of whether you apply for a local, UK domiciled, or international policy, you must demonstrate insurability. Insurers assess risk using several personal criteria, including:

• Age
• Occupation
• Hobbies (especially high-risk activities)
• Medical history
• Smoking status

Alongside geographical factors, these criteria determine both eligibility and premium level. Policyholders with higher personal or occupational risk may face exclusions or premium loadings.

To identify the most cost-effective and portable option, compare multiple insurers and confirm how each policy responds to changes in residency, occupation, or health. Domestic or local policies may appear cheaper initially but may not remain valid if you relocate permanently.

Length of Stay Abroad

Temporary expatriation may qualify for UK life insurance with limited overseas cover, provided you maintain your status as a UK resident and disclose your travel plans. Some insurers permit short-term mobility, typically up to 12 months, but terms vary.

By contrast, permanent relocation or non-resident status generally prevents new applications for UK-resident policies. Depending on your destination, you may need to explore locally licensed life-insurance products for long-term cover, particularly if you intend to remain in that country.

For globally mobile individuals, international life insurance is often the most practical option, offering broad portability and multi-currency flexibility.

However, such policies are usually regulated offshore and may not qualify for UK consumer-protection schemes, so regulatory status and jurisdiction should always be verified.

What Are the Main Portability Considerations When Selecting Life Insurance?

Portability is a crucial element of life insurance for British expats, as many UK-domiciled or locally issued policies may not provide adequate flexibility once you relocate abroad.

While some UK policies cover temporary stays overseas, they typically impose several limitations, including:

• A requirement to maintain a UK mailing address, bank account, and premium payments in GBP.
• Potential loss of cover or policy invalidation if you relocate permanently or fail to notify the insurer of a change in residence, which may be treated as non-disclosure.
• Administrative delays in processing claims due to documentation requirements, such as obtaining and translating foreign death certificates or verifying cause of death under another jurisdiction’s rules.

Policies issued locally in your country of residence can present similar restrictions. They may also complicate claims administration if your beneficiaries remain in the UK, since the process will be governed by local regulation, currency controls, and language differences.

If you require comprehensive portability, international life insurance is generally the most practical option. It is available to most UK expats who meet the insurer’s underwriting criteria and offers several advantages:

• Currency flexibility: International insurers often allow premium payments and death benefits in multiple major currencies (e.g., GBP, USD, EUR, AED, or SGD), reducing foreign-exchange risk for globally mobile policyholders.
• Cross-border coverage: These policies are specifically designed for expatriates and can continue to provide protection across different jurisdictions, subject to any sanctioned or high-risk-country exclusions.
• Global claims assistance: Dependants can typically access multilingual support, remote documentation submission, and cross-border claims processing, which helps navigate logistical and legal differences between jurisdictions.

Regulatory Protection & Jurisdictional Coverage

When selecting a life insurance policy as a UK expatriate, it’s important to understand which regulator oversees your policy, what compensation or policyholder protections apply, and under which jurisdiction any dispute would be settled.

The level of oversight and financial compensation protection differs significantly between UK-domiciled, offshore, and locally issued policies.

UK-Domiciled Policies

Policies arranged through a UK-authorised insurer fall under the supervision of the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA).

If you take out cover while a UK-resident, you’re normally protected by the Financial Services Compensation Scheme (FSCS), which can compensate policyholders if the insurer becomes insolvent.

However, this protection may no longer apply once you become permanently non-resident, as the FSCS only covers UK-regulated activities carried out in the UK.

Before relocating, confirm with your insurer whether your policy remains under FCA regulation and whether FSCS protection continues.

Offshore or International Policies

Many life-insurance products designed for expatriates are issued by insurers regulated in offshore financial centres such as the Isle of Man, Guernsey, Jersey, Gibraltar, Bermuda, or Luxembourg.

These jurisdictions operate their own solvency standards, policyholder-protection schemes, and compensation frameworks, which differ from those in the UK:

• Isle of Man: regulated by the Isle of Man Financial Services Authority (IoM FSA) and supported by the Policyholders’ Compensation Scheme, which may cover up to 90% of the policy value if the insurer fails.
• Guernsey and Jersey: supervised by the Guernsey Financial Services Commission (GFSC) and the Jersey Financial Services Commission (JFSC) respectively. These regimes provide prudential oversight but no statutory compensation scheme equivalent to the FSCS.
• Luxembourg: operates a tri-party custodial arrangement between insurer, custodian bank, and regulator to ensure segregation and protection of policyholder assets, making it a favoured base for EU-resident expats.
• Gibraltar: continues to follow many UK regulatory principles post-Brexit but is not automatically covered by the UK FSCS unless the insurer is also FCA-authorised.

While many offshore insurers are financially robust, these policies are not regulated by the FCA and are outside FSCS protection.

Before purchase, carefully review the policy jurisdiction, compensation framework, governing law, and claims-handling process specified in the contract.

Local Policies in Country of Residence

If you buy life insurance from a local insurer in your country of residence, the contract will fall under local law and regulation. Consumer protection and compensation mechanisms vary widely.

For example, EU-based insurers fall under the Solvency II regime, while jurisdictions such as the UAE, Singapore, or Hong Kong apply their own frameworks.

Local regulation can influence:

• how death benefits are taxed or transferred abroad,
• how currency controls or documentation affect claim payments, and
• the enforcement process if disputes arise.

Before committing to a policy, determine:

1. Which regulator authorises the insurer.
2. What compensation scheme, if any, applies to policyholders.
3. Which legal jurisdiction governs the policy in case of dispute.

Understanding these factors helps ensure your family’s protection remains enforceable and that you’re aware of the limits of any statutory safeguards once you relocate abroad.

How To Select the Right Expat Life Insurance Policy

To identify the life insurance policy best suited to your circumstances as a UK expat, consider the following practical steps:

Explore Different Insurers

If you plan to return to the UK within a short timeframe, inquire about UK-domiciled policies that permit temporary residence overseas. Otherwise, assess international policies issued from well-regulated offshore centres or locally licensed products in your country of residence, depending on your future relocation plans.

Before applying, confirm whether the insurer is authorised by the FCA, an offshore regulator (e.g. IoM FSA, GFSC, JFSC), or a local authority, and whether any compensation scheme applies.

Consider the Insurance Type

Choose term life insurance if you only need protection for a defined period, such as while repaying a mortgage or supporting dependants temporarily abroad.

Opt for whole-of-life (permanent) insurance if you want lifelong cover and potential cash-value growth for estate-planning purposes.

Be aware that investment-linked policies carry market and currency risk, and returns are not guaranteed.

Review Exclusions and Limitations

Discuss both geographical and activity-based exclusions with your insurer to understand the portability of cover. Common exclusions include residence in sanctioned or high-risk countries, participation in hazardous occupations, or death caused by civil unrest or war.

Ask specifically how the policy treats future relocations and whether you must notify the insurer to maintain valid cover.

Plan the Death-Benefit Distribution

Decide how benefits will be distributed among your beneficiaries. If you intend to use the policy as part of your estate plan and have significant wealth, consider placing it in trust to help keep the proceeds outside your UK-taxable estate and to bypass local forced-heirship rules in certain jurisdictions.

Obtain professional advice on how the trust interacts with local inheritance, succession, and reporting requirements.

Confirm Premium-Payment Logistics

Consult the insurer about how future relocations may affect premium collection and administration. Discuss:

• Accepted payment currencies and frequency (monthly, annual, lump-sum).
• Bank-account or direct-debit requirements if you move outside the UK.
• How address or residence changes must be reported to avoid lapses.

If premiums are paid in a foreign currency, consider the exchange-rate impact on affordability and benefit value over time.

Tax and Estate-Planning Implications

When living abroad, the tax treatment of life insurance can change substantially depending on your residency, domicile, and the jurisdiction in which the policy is issued.

For UK nationals, the interaction between UK inheritance tax (IHT) rules and local succession or wealth taxes is an important consideration.

UK Inheritance Tax and Domicile

For inheritance-tax purposes, domicile, not residency, is the key factor.

If you remain UK-domiciled, your worldwide estate – including the proceeds of any life insurance – may be subject to UK inheritance tax at 40% above the available nil-rate band. The proceeds are usually paid tax-free to beneficiaries, but they can still fall within the taxable estate unless the policy is written in trust.

If you have acquired a foreign domicile of choice and severed strong UK ties, UK IHT may apply only to UK-situated assets. Determining domicile status can be complex and often requires professional advice, particularly for long-term expatriates or those with dual connections.

Using Trusts to Protect Policy Proceeds

Writing a UK or international policy into trust allows the death benefit to be paid directly to beneficiaries, bypassing probate and generally keeping it outside the taxable estate for IHT purposes.

Trust structures can also help manage forced-heirship rules in civil-law jurisdictions (such as France, Spain, or the UAE) where local law dictates how estates are distributed.

When establishing a trust, ensure:

• The trustees understand their ongoing obligations in your country of residence.
• The trust complies with local registration or reporting requirements.
• The trust wording aligns with the governing law of the policy (e.g. Isle of Man or UK law).

Local Tax and Reporting Requirements

Even if a policy is UK-issued, local tax authorities in your country of residence may assess death benefits or treat them as part of a taxable estate.

Examples:

• Spain and France apply local succession or life-assurance taxes.
• Australia may tax certain payments to non-dependants.
• UAE and Gulf states generally impose no inheritance or income tax, but succession follows Sharia-based inheritance rules unless otherwise structured.
• Expats should confirm with a qualified tax adviser how the policy will be treated both in the UK and locally. Double-tax treaties rarely eliminate IHT exposure but can reduce overlap.
• Currency, Repatriation and Exchange-Rate Effects
• If your policy is denominated in a foreign currency, the exchange rate at death determines the GBP-equivalent value of the proceeds for UK IHT purposes.
• In volatile markets, this can materially affect your taxable estate’s value. Similarly, transferring funds to UK-based beneficiaries may require compliance with foreign-exchange controls or local remittance reporting.

Effective use of life insurance in an expatriate estate plan hinges on understanding domicile, trust planning, and local taxation.

Before establishing or altering a policy, confirm how both UK and local tax laws apply to premium payments, policy ownership, and death benefits, and obtain professional cross-border tax and legal advice to ensure your arrangements remain compliant and efficient.