Impact of residency on insurance

A client’s residency status may change over time, so it is important to know the impact this may have on the client’s ability to obtain cover, whether cover can continue if the client moves overseas, and the tax treatment of any proceeds paid. We discuss each of these points below. Obtaining and maintaining cover People who have been granted permanent residency in Australia can apply for Term Life, TPD, Living (Trauma) and Income Protection cover. In certain situations, cover can be considered for individuals who are non- permanent residents, such as holders of certain visas (e.g. working visas or specific temporary visas such a spouse or an employer sponsored visa). This may vary across insurers. Retail policies, once commenced, will generally provide worldwide cover. Therefore, if the insured person subsequently moves overseas, they will still be covered under the same terms. However, in order to meet claim requirements, the insured person may need to return to Australia, otherwise non-death insurance proceeds may not be paid, or may be limited. This is known as a ‘repatriation clause’. Some group insurance policies may limit cover to the length of time that the insured person has Australian residency or is eligible to work in Australia. Read More