International Life Insurance In Times Of Global Crisis

A few years into the 2020s and it’s clear to see this decade will be marked by the emergence, escalation and response to several crises of global proportions.

From COVID-19 to the war in Ukraine, the Israel-Palestine situation and the increasingly evident impacts of global warming and climate change, many people around the world find themselves looking forward with a sense of unknowing, perhaps even pessimism.

This prospectus of doom hardly bodes well for consumer purchasing power or confidence in financial institutions. As individuals, we’ve never felt quite so conscious of our vulnerability to the immediacy and volatility of global events.

Given the present conditions of uncertainty, how can a relatively expensive, long-view product like international life insurance stay relevant?

International life insurance in times of global crisis

The global context: A world without answers

The COVID-19 pandemic blind-sided the world, causing even the most advanced countries to panic. Markets tumbled, successive lockdowns came and went, and even now we are dealing with the long-term impact of the pandemic. Furthermore, it seems likely that COVID-19 was only a warning shot, and that a slew of other, even more serious pandemics could be on the way.

If COVID-19 created the illusion of a world united in its purpose, the Russian invasion of Ukraine in February 2022 was quick to shatter it. The notion that two highly advanced countries could resort to war was one that many of us thought would ever happen again. Not long after, and not far away, another advanced nation, Israel, was attacked. This led to a rapid escalation in a conflict that has now resulted in the loss of thousands of lives.

Elsewhere, the world has hit a number of fearful records. 2023 was the hottest year in the Earth’s history. The world’s oceans reached their highest level for heat content. Antarctic sea ice reached a record low. Extreme weather events have become more common and more serious, as the world now seems to be being constantly battered by wildfires, cyclones, typhoons and floods.

What is most noticeable in the face of these events is that our elected leaders seem powerless to stop or control the situations before them. This is leading to widespread disenfranchisement, exacerbated by the global cost of living crisis, which has led to increased levels of poverty, declining mental health and decreased spending on healthy food worldwide. Many of us have never felt so personally vulnerable to events outside of our control.

How can international life insurance help?

Insurance is about dealing with risk. It helps us to prepare for the unexpected, and to mitigate the negative effects of events outside of our control. In times of increased risk, it stands to reason that increasing one’s cover under an appropriate insurance policy is the most logical course of action. But in times of financial distress, this logic is tested sorely. At what point does one prioritise risk of potential financial loss over the reality of here and now?

Products like international life insurance – niche, relatively expensive, and protecting against a risk whose effects won’t personally affect the purchaser – are often the first to be dispensed by consumers. But let us make the case as to why life insurance might be a savvy investment in these times of unprecedented uncertainty.

Consumer concerns about life insurance

Since February 2020, we’ve fielded hundreds of questions from brokers, members, and prospective members about our life insurance product. Each question has a common theme: we understand the importance of international life insurance, but we’re more concerned with our current financial situation.

Here’s a rundown of these three audiences:

1/ Our broker partners

We work with thousands of brokers around the world. Some are part of enormous, multinational brokerages. Some are small, independent outfits. Yet they all want to understand how they can sell international life insurance to their clients in the present climate.

2/ Our members

Our members might be experiencing financial pressure. Perhaps they are considering cancelling their policy, or maybe they are choosing which insurance policies in their portfolio to maintain and which to cancel.

3/ Prospective members

Those people who until recently were considering purchasing a life insurance policy with us, but have shelved those plans due to economic uncertainty.

The importance of life insurance

We, William Russell, cannot advise consumers or brokers on why one insurance product is more important than another. But we can put the experience and expertise we’ve accumulated over the last 30 years in this space to good use, making general, informative statements about the importance of adequate financial protection.

For most of us, however, nothing will ever be more important than the future well-being of our family. In these unsettling times of increased risk and personal vulnerability, we must all decide whether we can afford to sacrifice long-term protection for the here and now.

Perhaps the investor’s mantra of maintaining portfolio discipline in periods of market volatility is relevant here. Investors commonly argue that time in the market is far more effective than timing the market. Just consider this note from Warren Buffet from the 1960s:

Life insurance is not so different from investments. We don’t get to choose when disaster strikes, and we don’t have the chance to buy an insurance policy once the effects of the risk have already made themselves known. But when disaster does strike, surely we’re better off knowing we can rely on a good-quality insurance policy from a reputable provider.

We purchase life insurance to protect our families against both the present and the future. If our general risk increases, then it makes sense to increase our protection. Perhaps this means prioritising our current insurance portfolio or taking out additional cover in challenging times.

What are insurers doing?

Analysts report that claims related to COVID-19 will exceed the cost of events like Hurricane Katrina and 9/11; it can be hard for insurers — facing unprecedented losses — to know the right thing to do.

Not for some time has the insurance sector been under the microscope of public scrutiny. Livelihoods are at stake on both sides of the line. Several businesses in the UK are taking action against insurers such as Hiscox for non-payment of claims under business interruption insurance policies.

Some insurers seem better prepared to weather the storm than others. With a well-hedged balance sheet, companies like Munich Re are increasingly confident of managing financial losses. Yet other insurers have struck a tone-deaf note — e.g., AXA, who have ignored pleas from the EU regulators to suspend dividend payments to shareholders.

Wherever you go, go with total peace of mind

At William Russell, we have over 30 years’ experience of providing international life insurance exclusively for expats like you.

Become a member today to enjoy worldwide coverage, giving you total peace of mind wherever you move to live and work. We are proud of our award-winning customer service and our comprehensive policies that have helped families live their lives to the full.