Jill Kerby

WILL OUR HEALTH INSURANCE PLAN STILL OPERATE IN CANADA?

PR writes from Wicklow:  We are moving to Canada at the end of January. My husband was offered a transfer to a partner company of the one he works for here.  We were told it could be up to six or eight weeks before we can be registered for the Canadian medicare system.  Before then, will our Quinn Health Insurance plan still be in force. Someone told me that if they know you are emigrating they cancel your contract immediately. I was hoping you could tell me before I contact them.  Also, we each have life insurance policies (with Irish Life).  Are these still OK if we keep making the payment every month. I am 32 and my husband is 35. We have three children.

According to the Canadian Immigration Service, there is a three month waiting period in the provinces of British Columbia, Ontario, Quebec and New Brunswick before new immigrants with permanent residence status can become eligible for Canada Medicare. The healthcare system in Canada is operated by individual provinces, which operate different rules, but wherever you live you will need to immediately apply for insurance cards for everyone and register with a family medical practitioner. Temporary health insurance can be purchased from Canadian insurance providers and the Immigration Service will even pay for the cover for those immigrants who cannot afford to pay the private premiums. 

Temporary insurance is important since your Quinn health insurance policy is only valid if you are a resident of the Republic of Ireland, says health insurance advisor Dermott Goode (www.healthinsurancesavings.ie).  The international travel cover in your policy is also restricted to medical emergencies only during short stays abroad and membership of a scheme will end immediately if the member stops living in Ireland for more than six months per calendar year” said a company spokesperson.

 “Strictly speaking your readers should cancel their policy when they leave Ireland and claim any pro-rata refund if they have paid up to their renewal date.” Goode said that temporary international health insurance can be purchased here from the likes of BUPA International, VHI, AXA or Allianz, but you should compare the price of these policies with the Canadian ones.

As for your life insurance policies, you can keep your Irish policies but all benefits would be paid tax-free in euro, says Irish Life but there could unfavourable tax implications in Canada so you need to check with a Canadian tax advisor.

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New Currency Debt 

HO’D writes from Dublin:  You mentioned in your column last week that if Ireland had a different currency to the euro, mortgages would be valued at the euro equivalent of the new currency at the time of the split. I wondered about this as inflation over time normally reduces the real value of debt, the pound paid back is worth less than the pound borrowed. Also what if the euro was retained for the "lesser" countries and valued much less than the ‘super euro’ of the richer countries. Would the mortgage now be valued at the super euro value at the time of the split?

Inflation always eats away at the value of debt (and savings), but it works regardless of the currency.    This question of what existing euro debt would be worth if Ireland left the euro and switched to a new, devalued currency against the euro, is a different matter. If we owed another euro country €100 million, but left the euro and reverted to a punt currency, whose value was set at say, 20% less than the euro, it would cost us the equivalent of 120 million new punts to repay the €100 million owed.  The only way we could pay them less is if they forgave us a portion of our original debt. 

If the eurozone broke into two new zones of richer and poorer countries, we could presumably continue to pay the other countries in our zone with whatever value euro we assumed, but if it was worth less than the other, richer zone’s euro, the final bill to them would be higher.   Since most Irish mortgage lenders had to borrow from the rich eurozone members in order to sell their homeloans, it could be presumed that such personal debt would cost more if it was being repaid in the devalued second tier euro currency. 

Many people question whether our huge state and personal debts can ever be repaid, and suggest instead that, aside from a new currency, what this country and many individuals also need is a large serving of debt forgiveness.

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COVER FOR CHILDREN 

CD writes from Waterford: Myself and my husband are looking for some advice regarding savings that we started in the credit union for our children, a 16 yr old and an 11 yr old. They have savings of  €4,500 and €3,500 respectively. We are considering taking most of their money out of the credit union and putting it somewhere "safer".  We are worried that Ireland will default and we will leave the euro, thus devaluing their savings. We were thinking of moving it to Rabo Direct or the Post Office, we just don’t know what to do for the best.

The security of your savings is important, but unless you are worried about the solvency of your credit union, you should keep in mind that your €8,000 falls under the €100,000 bank deposit guarantee, which also applies to credit unions. Post Office savings bonds and certificates are entirely State guaranteed and DIRT free.

The Dutch bank, RaboDirect is certainly one of the safest banks in Ireland, but it is not clear whether all deposits will remain in euro or convert to a new Irish currency in the event that Ireland did leave the eurozone.  A spokesperson for Rabo said, “        .

 If you need access to this money anytime soon, the cost of converting the children’s savings into a non-euro currency in a bank, which would protect them if we left the euro, may not be worth doing. Foreign currency accounts often have minimum deposit amounts for one thing, and can carry exchange costs and other charges. All paper currencies are at risk of devaluation. As a longer term hedge against both that and inflation, you could consider switching some of the children’s savings into gold or silver – real money – or another tangible asset - some people opt for oil shares, others a piece of art or an antique - as a hedge against both the risk of devaluation and inflation.