The Error of Self Negligence

01/13/2022

How many times do people say or even just think "it will never happen to me"? The problem is it does happen. The "it" is any kind of disastrous situation which affects you and your family.

To a lesser extent if you are the family breadwinner and lose a spouse there may be difficulty in continuing life as it was without additional help with your children. Someone to care for them whilst you are working may be expensive. Extended families will often provide the answer to these difficulties but not always.

However, the most precious asset you actually have is your own ability to earn. This provides ongoing income to cover the cost of living and additional savings to provide for your golden years in life. If your ability to work ceased because of medical reasons you will not only have to find the resources for ongoing expenses but these will be made higher by the fact that you need additional care and medical attention. Not only that but you will also lose the ability to save for the provision of your retirement which will have hit you already prematurely. Retirement on medical grounds is a very different thing from kicking up your heels to relax and travel the world, play golf, take up those interests you always meant to.

This does not mean that you have to rush out and buy some life insurance and disability insurance. However, if you have been remiss and not planned for what would happen in such an event you really ought to at least give it some consideration and make a plan.

Some expats say they will deal with whatever life throws at them and that they can cope with any eventuality. If that is the case and they are prepared for the worst then they are effectively self-insuring.

Others feel that they have sufficient assets to cope with almost any challenge which may come their way. Again provided they have given this some thought and know that provisions are made in the event of a disaster they have made at least some plans.

If you are one of the vast remaining majority who say "it will never happen to me" then you are really being negligent to yourself and your loved ones. By burying your head in the sand you are ignoring the potential problem and hoping it will never actually occur.

Several years ago we knew of a case where a young expat became ill and was hospitalised in a coma. It was touch and go whether he lived. He eventually emerged from his oblivion several weeks later only to discover that he was paralysed from the waist down. He was essentially a paraplegic. This type of event must be a massive shock to the system and he had to recover psychologically as well as physically. His family were also devastated by this catastrophe. He was one of the lucky ones. He was employed by a multinational corporation who had covered him for just such an event. Our invalid was repatriated along with his family, to his home country. His house had many modifications made to it, he was able to buy a care and have it modified for him to drive, all his private medical expenses were covered, he was given all the medical aids required to continue in as comfortable life as he could be given such as wheelchairs and stair lifts, his salary was paid for five years and he was given a considerable lump sum as compensation from the insurance company as this was classified as a critical illness. This person has been trained to work on computers and works almost entirely on the internet. He has started a successful business which he runs from home. His wife and their family are settled into their new environment and the entire family are grateful for the fact that they were so well insured!

We knew another expat who suffered a back injury which left him almost totally incapable of physical movement at the time. He was admitted to a hospital but had no insurance of any kind. He was told that he required surgery on his spine and the cost was almost prohibitive. However, knowing that he could raise the necessary amounts he decided to go ahead. Then he was told that he had a heart condition which prevented him having a general anaesthetic. The remedy was to have a heart operation which would actually be more expensive than the spine surgery. He was in constant pain from his back and was left with a very difficult dilemma. This was only the start. He was unable to work and thus could not earn a salary for the time he would be disabled. It would take a long time for him to return to being fit enough to cope with much movement and so he would be very limited in what he could do physically. Whilst he had a managerial career it was still difficult to actually get to and from an office. Thus his savings were all earmarked for this surgery but he had little chance of working after it was complete. Perhaps we might describe this "a complete financial wipe out".

Whilst our first expat was well cared for financially he will never walk again and lives a very restricted physical life indeed. He is actually comfortable in terms of his wealth which covers his expenses and general cost of living. Most of us would not wish to swap our health for such financial comfort. However, would you like to face the predicament of our second expat? He has very poor health and very little financial backing either. His prospects are grim. So, how far do you go in making provisions for yourself in case of such upheaval? If you continue to keep your head buried in the sand you have no chance of coming to grips with the practicalities of these types of possibility. Some expats realise that proper planning can assist them in making the right choices. As we get older our asset base usually increases and then we find we have a great deal more flexibility enabling us to perhaps make insurance provisions for events of a very high cost nature. We do this knowing that we can cover the lower cost events with our own resources. Younger expats need to make higher provisions for the near and medium future and these can tail off as their resource base grows through their career. Careful planning should be made in respect of the ongoing requirements and the projected wealth as time goes on.

Whatever your current situation it is best you seek advice from a professional who understands the detailed requirements and how to calculate them. He will be able to provide advice on the wider picture of all aspects of your financial life and how it will develop as an ongoing concern over time. This will allow you to balance effectively between selecting the right protection and supporting your own lifestyle requirements under all circumstances.

If you think "this can never happen to me" you really ought to think again.

Whether you are living abroad or are an expat away from your home country, we can offer you a range of creditable life and health coverage that include affordable insurance plans, insurance policies that provide lifetime insurability and worldwide cover. Get in touch with us for free no obligation advice: info@expatwealthatwork.com