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   When should I buy life insurance?
A question for which there’s no exact answer! At a minimum, most people would like
to leave enough money to provide for the cost of their funeral. Aside from that, many
people feel they don't need life insurance unless and until they have surviving dependants,
debts or other liabilities to be paid off, or other needs to provide funds after their death.

As one’s lifestyle changes and evolves, the need for life insurance also changes. Each
lifestyle change brings a potential need for more or less life insurance, and therefore,
ideally, the coverage should be reviewed at every such point of change. Most financial
consultants recommend a regular and frequent review of life insurance as part of overall
assets and liabilities.

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   How much should I buy?
Again, there may not be an exact answer! If there’s a specific amount is needed at
your death - to pay off a mortgage or other debt, to donate a defined lump sum to a charity,
to fund college fees, etc. - then the amount of life insurance you need may be quite easy to
calculate. If the question is how much your survivors may need to live on after your death,
it becomes a harder question to answer. Some factors which affect this calculation are: the age
and number of survivors; where they’ll live and the lifestyle they’ll need to support;
the rest of the estate you‘ll leave them; and various other points you need to consider.

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   Where should I buy it?
Until recently, you could only buy life insurance in your current residence or in any other
country where you had an active connection, for example: employment or a residence from
which you actively conduct ‘lifestyle’ activities (such as holding a drivers license, doing banking,
and making credit card purchases). That’s a legalistic way of saying that you could normally
buy life insurance only where you live now or in your Home Country if you maintained a
residence there, traveled there often enough to be medically-examined there, and could provide
financial references and other underwriting requirements there, if necessary.

For expats of the US, Canada, and the UK, this was significant since premium rates for life
insurance in those countries have dropped quite dramatically compared to the rest of the
world, due in part to advances in life expectancy and the liberalization of various statutory
requirements for life insurance companies.

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   Has that changed?
In the past few years, with the advances in communications and purchasing insurance
over the web, international life insurance has become an easily-available commodity.
Now an applicant, regardless of his citizenship or residence, can purchase life insurance
from a variety of sources and still handle the underwriting requirements.

These international policies offer many advantages, including benefits and premiums
payable in US dollars or other stable currencies; medical (and other) exams conducted
where you live; payment of death benefits wherever you or your beneficiary(ies) designate;
and payment of premiums by wire transfer, cheque or credit card.

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   So what should I be looking out for now?
These advantages are somewhat offset by the risks of buying international life insurance.
In the US, Canada, and the UK, there are regulatory authorities that exercise a supervisory
role over the activities of the insurance companies within their jurisdiction. There are also
rating agencies which provide ratings of insurance companies.

On the other hand, you shouldn't have to pay inflated premium rates because of an
insurance company’s pedigree! There are international insurance companies
which offer premiums and policies based on US policy designs, US mortality rates,
and US premium tables, and which are owned and guaranteed by
major US insurance companies.

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   Are there any tax consequences to International Life Insurance?
Any life insurance policy which offers asset accumulation may create tax
consequences for its owner. These consequences may be positive or negative
and therefore need careful planning and analysis. If structured correctly,
international life insurance can provide the purchaser with many advantages which
may typically not be available to the purchaser of a domestic life insurance policy,
such as reduced administrative costs and the greater ability of the owner to manage
the investments into which the assets of the policy are placed.
(The topic is further addressed in 'The use of international life insurance in tax planning')

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   OK, what’s the bottom line?
In summary - life insurance is for the living, not the dead! By and large, you don't need it
- your survivors do. Those who depend on you or will be left with a burden when you die
are the ones who might need the life insurance on your life. And, ideally, it should be a part
of an overall financial plan which takes into account all of your other assets and liabilities.
Remember it’s you who has to make the final decision to buy it - while you can.

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