Why Your Work-Based Life Cover Is Worth Less Than You Think

As a successful professional, you’ve probably put a lot of thought into building a stable life for yourself and your family. You’ve worked hard to get where you are, and as an expat, you’ve taken calculated risks for the opportunity to enjoy a better lifestyle abroad. But have you given the same level of attention to protecting your loved ones should the worst happen?

Many expats rely on the life cover included in their employee benefits package, often known as Death in Service insurance. While this can seem like a good safety net, it might not be as reliable as you think. In fact, it could be putting your family’s financial security at risk.

The Hidden Gaps in Work-Based Life Cover

Life insurance is often a topic we put off discussing—especially when everything is going well. But relying solely on the life cover provided by your employer can leave you and your family dangerously under-protected. Let’s face it, one-size-fits-all solutions rarely fit anyone perfectly, and work-based life insurance is no exception.

For expats, the risks are even more significant. As an international worker, the challenges you face—like higher medical costs, lack of a local support network, and the potential for sudden job changes—make it critical to ensure that your life insurance is designed to suit your unique needs. So, what exactly are the pitfalls of relying on employer-provided life cover?

Misconceptions and Shortfalls of Work-Based Life Cover

1. Portability Isn’t Guaranteed

The average person has around 12 different jobs over their lifetime. What happens to your life cover when you switch roles or move to a new company? In most cases, your employer-sponsored policy doesn’t follow you. The moment you leave, your coverage likely ends. And if you’re between jobs, there’s a chance your family is left vulnerable.

Personalised life insurance ensures continuity. It stays with you, providing peace of mind regardless of where your career takes you.

2. You May Not Have Enough Coverage

It’s easy to assume your employer's policy will be enough. After all, it’s part of your benefits package, right? However, most work-based life cover provides a fixed multiple of your salary—often two or three times your annual income. While that may sound like a lot, consider your actual financial responsibilities: mortgage, school fees, and other living expenses. Will two years’ worth of salary be enough to maintain your family’s lifestyle and protect their future?

A personalised policy is tailored to cover the full range of financial obligations you might leave behind, from debts to education and retirement costs for your family.

3. No Coverage for Your Spouse

If your spouse is a homemaker or earns less, many people think that only the main breadwinner needs life insurance. But if something were to happen to your partner, how would it affect your ability to continue working or provide for your children? Most work-based life cover policies don’t include spousal coverage, and those that do offer minimal amounts.

A personalised plan allows you to protect your entire family—not just yourself.

4. Health Issues Can End Coverage

Another often overlooked shortfall is the impact of health. If you were to fall seriously ill and lose your job because of it, your employer’s life cover typically terminates when your employment ends. At this point, getting new life insurance could be either unaffordable or impossible due to your health condition.

Personal policies can include critical illness coverage, ensuring a financial safety net if you’re diagnosed with a serious illness.

5. Discretionary Payouts

Many company life insurance schemes leave the final payout decision to the employer’s discretion, which can lead to complications and delays. With a standalone policy, you can have greater control over the beneficiaries and payout structure, ensuring your family receives the financial support they need without unnecessary hurdles.

The Real Cost of Being Underinsured

It’s heartbreaking, but too often, people only discover the shortfalls in their life insurance when it’s too late. Expats are especially at risk because, while enjoying a higher standard of living abroad, the cost of emergencies—whether medical, travel, or otherwise—can be significantly higher. And when you’re far from home, without the support networks you might have in your home country, these costs can quickly spiral out of control.

If you were to pass away unexpectedly, would your family have enough to cover mortgage payments, school fees, day-to-day living expenses, and the other financial commitments you’ve worked hard to maintain? The emotional toll of a loss is hard enough. Don’t let it be compounded by financial hardship that could have been avoided with the right cover in place.

Why a Personalised Policy is Essential

This is where a personalised life insurance policy comes into play. Tailored life cover is built around your specific circumstances—taking into account your family size, financial responsibilities, career trajectory, and future aspirations.

A personalised policy can:

• Ensure continuous coverage, no matter how often you change jobs or relocate.
• Provide sufficient financial protection to maintain your family’s lifestyle.
• Include critical illness cover, offering financial support in the event of serious illness or disability.
• Cover your spouse and other dependents, so your whole family is protected.
• Give you peace of mind that the payout is guaranteed, with no discretionary decisions involved.

Why Tailored Coverage Matters Even More for Expats

For expats, the stakes are even higher. Living abroad often means you’re far from family support systems, and healthcare costs in your host country could be significantly higher than back home. Plus, as a Western expat in a senior position, your financial commitments are likely more complex. From international school fees to maintaining a certain lifestyle, it’s crucial to ensure your life cover is truly comprehensive.

Relying solely on your employer’s scheme could expose your family to unnecessary risks. But with a personalised life insurance policy, you’ll have the security of knowing your family is fully protected, no matter where life takes you.

Take Control of Your Financial Future

As you focus on your career and enjoying the benefits of expat life, don’t leave your family’s financial future to chance. Now is the time to take control of your life insurance by investing in a personalised policy that covers the full scope of your family’s needs.

You’ve worked hard to get where you are—make sure that hard work isn’t undone by a lack of proper protection. Speak with a specialist today to ensure your loved ones are fully covered and that you have the peace of mind you deserve.

Let Skybound Wealth help you take control of your financial future. Contact us today for a personalised consultation.