The Expat Advisor

Organizing Banking and Insurance Matters

Proper handling of your US dollar banking needs prior to departure is a fundamental part of getting ready to be an expatriate. Most companies provide no assistance in this area so you will need to take care of this on your own. Most expats will continue to have US based bills to pay while they are overseas – insurance premiums, credit card payments, tuition, mortgages, student loans, taxes and utilities are among the most common ones. In addition to an account for paying bills, many expats will want to have a savings account back home where they can send their earnings for accumulation and investment.

Consider suspending or canceling some of your credit cards. It may not be practical to use a credit card from your home country for credit card purchases in the host country as you will lose exchange rate conversions from the local currency to your home currency. Weigh these concerns against the need to maintain a current credit record in your home country during your stay abroad. It is probably wise to leave at least two credit accounts open and active even while you are outside the country. After staying several years outside of the US, you will still need an active credit history available if you will have need for a mortgage, car loan or home equity line of credit. All of these are pretty tough to get without a credit history.

Some expats leave a friend or relative in charge of their home country checking account so the US bills can be paid. This can be stressful for relationships and not very reliable. Prearranging online account access and bill payment is a better plan of action. Leave clear instructions with your bank on actions to be taken upon maturity of time deposits. You may wish to leave money in your savings and checking accounts in order to facilitate payments in your home country. For example, payment of premiums for any continuing insurance policies and magazine subscriptions. Many expatriates use their principal bank account in their home country and transfer a set amount to the host country on a regular basis. Some companies allow employees to cash checks from home or transfer funds as needed.

Banking Checklist

• Identify which US accounts will remain open in order to keep an active credit history in place.
• Determine which US banking products and services will be needed while you are outside the home country e.g. checking, savings, credit card, online access for bill payment and investment.
• Is my bank able to provide the types of accounts and services I need?
• Does my bank offer remote, secure online account access and bill payment services that can be accessed in the country where I will be living?
• Does the online account access allow me to transfer funds between checking and savings accounts?
• Does online banking let me be in charge of my accounts while away – including online bill payment?
• Can I apply for and open accounts with my bank while living overseas – including mortgages – when the time comes for repatriation?

Insurance

Review your family’s insurance policies. Insurance for items you have sold in preparation for your move should be canceled. Ensure that property remaining in your home country is adequately insured. Inform your insurance company about your departure, the storage conditions of your property and your expected period of absence and adjust policies accordingly.

Ask your employer about health and medical insurance benefits during your stay in the host country. Normally health and medical insurance policies from the home country not will offer coverage in the host country. You may be able to temporarily re-instate your health insurance policy for short visits home and holidays as well as upon your permanent return. Before suspending your health insurance, you should obtain the medical, dental, optical and pharmaceutical benefits you are entitled to.

Ask your life insurance company about the effects your overseas posting may have on your life, endowment or annuity policies. Find out about options for premium payments while you are in the host country. Assess the possibilities of making annual payments in lieu of any periodic payment installments you may currently make. Find out if your life insurance company has a branch in the host country that you can work with.