InsureExpats.eu

As the Euro zone struggles with its mountain of debt, the old trick of devaluing your domestic currency is no longer a resource the seventeen members can rely on as they all sit under the umbrella of one currency and one interest rate.

In the UK however, the Bank of England has been able to slash interest rates to levels not seen in over 400 years. At the same time they have talked the value of the pound down to levels not seen in 25 years when measured against a basket of global currencies so logic would assume that the UKexport industry must be booming….but this is not the case.

In the first instance you need to be an export driven nation, and the UK has long since seen both the financial and service sectors make up a much larger proportion of GDP than the export sector. Secondly the UK’s trade balance has actually widened – one of the reasons being that manufacturers still need to import basic materials to manufacture the goods they export. And lastly, UK companies that do export have used the weakness of the pound to increase their profit margins rather than make their goods more competitive in a global market.
So for the UK a weaker pound hasn’t really helped the economy recover. I could also argue that it is now in the best interest for the Bank of England to let the pound rally to monetise the high rate of inflation the UK currently suffers from.

The US has also seen its currency tumble, but this is more down to the actions of the Federal Reserve who have embarked on a series of Quantitative Easing programs, pumping billions of dollars into the global economy, forcing the dollar lower and commodity prices to records highs. Unlike the UK, inflation in the US remains low as the economy has a huge amount of spare capacity, with unemployment sticky around 9% and the housing market still extremely weak.

The worry for the markets is that US inflation may suddenly spike and the Fed may have to raise rates a lot faster than anticipated choking off any USeconomic revival and also putting pressure on the United State’s huge debt obligations as yields rise in the US treasury market.

The Aussie dollar is the currency that keeps on giving and it is difficult to see this changing. Australia has become China’s supplier for commodities and as China continues to expand, the Australian economy will flourish. Not to mention countless hedge funds and Central Banks keen to diversify out of the US Dollar are moving billions into the Australian dollar. And finally the Reserve Bank of Australia is likely to raise rates once again giving a yield of 5% … compare that to the UK, Eurozone or the US and you can see why the Aussie dollar is currently the darling of the currency markets.

Keith Spitalnick LLB (Hons)

Regional Sales Manager

Currencies Direct

Plaza de las Orquídeas, Local 5, Nueva Andalucía, 29660, Marbella, Málaga, Spain

T: +34 902 310 444         M: +34 687 417 035

F: +34 902 310 440         E: keith.s@currenciesdirect.com

www.currenciesdirect.com

www.twitter.com/currencyblog

Expats in Spain

Moving to Spain temporarily or permanently is a decision that an expat thinks deeply and thoroughly before taking it. Many beloved ones will stay back in their home country and the expat will not see them as often, even though Internet and the low cost airlines will make him feel closer to home than some years ago. However, within the decision of moving to Spain one must consider the possibility of passing away on Spanish soil. No one wants this to happen, but it can happen. For this reason, one must evaluate what options the insurance Spanish market can offer you to fulfil this need. This type of insurance has been distributed in Spain for almost a century and works different than in the rest of Europe. In Spain it is distributed as an independent product and it acts as a service provider, managing the insurance company all the paperwork. With the Caser Expatriate Funeral Plan a one call service is provided in English 24 hours 365 days. This helpline service is the only call that the next of kin needs to make. Caser will then take over the arrangements and planning of all of the arrangements be it a funeral or repatriation.

What should I know?

Let’s list for example some of the key aspects that an expat should consider before contracting a funeral insurance product.

1. How much does funeral insurance cost?

It depends on the insurance company and the product. Caser offers a product to the expats of under 71 years old that includes repatriation of the body to the home country, a 24 hour helpline (legal and product orientation) and many other covers from a very competitive premium. You will find three guiding examples with their annual premium:

1. Man, 65 years old, English nationality: 140 euros / year.

2. Man, 55 years old, English nationality: 65 euros / year.

3. Man, 45 years old, English nationality: 35 euros / year.

Don’t forget that if an expat contracts an insurance policy, he will have access to funeral services at a much lower rate than if he contracted the services directly himself.

2. Is there a waiting or grace period?

No. For example, if an expat contracts a policy the 1st of January of 2011 and he passes away on March 2nd, 2011 the policy will have full coverage. This is a huge difference and advantage if we compare funeral insurance with other products distributed in Spain under the name of Funeral Plans where you must pay upfront between 3.000 to 8.000 euros in some cases. And if you pay under instalments you could end up paying up to 10.000 euros.

3. Can an expat be sure that the insurance company will cover 100% of the funeral costs?

Yes. The insurance companies increase yearly their premiums based on the cost of living in order to guarantee at all times 100% of the covers that were contracted by their clients.

In Spain, more than 50% of the population has funeral insurance. This fact must be taken into consideration by any expat due to two relevant aspects: experience and infrastructure. Over 100 years of experience back up the Spanish exclusive know-how on this matter and also have allowed the creation a solid infrastructure to service the market in Spain and abroad.

4. Could there be a case where the Insurance Company would not pay the funeral service contracted?

If the policyholder has knowledge of a health problem when the funeral policy is being contracted, he should inform his insurance intermediary so the insurance company can evaluate his case. If not, in case of death, if the insurance company, from the information obtained from the death certificate and its medical evaluation, determines that the policyholder’s health condition was not the one stated in the policy, could decide to decline the coverage. In these cases, the family would be informed about this decision and they would be offered the possibility to provide medical documentation that could prove that the policyholder had no knowledge of his health problem at the time of contracting the policy. If the information provided to the insurance company showed enough positive proof, the insurance company would pay out immediately all the funeral services costs as stated in the policy. Keeping an updated medical history, not just for this matter, it will always be a good idea.

5. Would the insurance company pay back any money to the relatives if the funeral costs were lower than what the insured had paid in life?

It depends on the insurance company. Caser pays back 25% of the net premiums as long as three years have gone by since the issue date of the policy, the policy is active, and all the receipts have been paid and no previous coverage has been made to the same policy.

You can get more information on funerals in Spain here, and you can get an accurate quotation of costs for your individual circumstances here.

The truth about off-plan property

Such was the enthusiasm of holiday homebuyers during the Spanish property boom that many companies were able to cash in by offering homes off-plan. This initiative proved popular, since construction companies were able to draw up payment schedules that helped the purchaser to raise the funds in stages, meaning that the developers received regular injections of cash to finance completion of their projects.

Incomplete projects

When things went according to plan, this scenario worked well, enabling purchasers and builders to benefit from advantageous payment schemes. However, as Europe and the USA’s credit crisis worsened, some off-plan purchasers found themselves out of pocket, as incomplete projects meant that they were unable to sell or rent their property to cover their costs.

So what should you do if you find yourself in this position?

If your property developer’s company has collapsed and does not complete your Spanish property, or if a Spanish company folds without paying you, you will need to join in their bankruptcy proceedings to recover all, or part of, what they owe you. You will have to participate in the “Competition of Creditors”. This allows you to compete against other creditors for the greatest share of the available money. However, you will need a good lawyer and to move quickly.

The Competition of Creditors is overseen by an external team, who will assess whether the company’s problems are temporary and can be repaired, or whether insolvency is the only avenue open to it. In this case bankruptcy will allow for continuity through the orderly sale of assets.

Workers still owed salary will be covered by the Wage Guarantee Fund, but other creditors should fall under Bank of Spain regulations that require bankrupt companies to return 25 per cent of the money paid to the company by creditors, who will obviously be freed from paying any more fees.

A judge will appoint receivers; a lawyer with at least five years in practice, an auditor, an economist or accountant also with five years experience (in every case they must be registered with their professional body) and a creditor. These will be responsible for liquidating the company in the way that most efficiently maximises its assets that can then be dispersed to the list of creditors. They will also check that no fraud has taken place.

Once the Competition of Creditors is accepted by the judge, the receivers have two months to assess and evaluate the company’s situation, although the deadline may be extended for another month, depending on the complexity of the process.

The most favoured creditors are the former employees, the government and, finally, any body from whom the company has received a secured loan.

The buyer has the same rights as he had before the declaration of insolvency. If the company fails to fulfil its promise (such as not completing the building of the development), the buyer is entitled to a refund of the full deposit. If the development company is liquidated all the buyers should have their deposits/payments refunded in full. If the development is constructed, they will have to complete and sign the title deed of the purchase before a Notary Public against the payment of the final payment due.

Perez Legal Group has extensive experience in dealing with off plan matters and has successfully claimed back deposits in full for clients who bought property that never reached completion. If you could benefit from our assistance then please contact us via our website or by calling: +34 952 833 169.

Many thanks to Raquel Pérez for this article.  If you are in need of legal advice relating to any legal matter you can contact Racquel on the details below…

Raquel Pérez

Director

raquel@perezlegalgroup.com

Perez Legal Group     www.perezlegalgroup.es

Centro Comercial Elviria, oficina 6

29604 Marbella

(T) +34 952 833 169

(F) + 34 952 830 262

(M) + 34 699 45 66 97