'New' Life Insurance Travel Guidelines

Life insurance companies may soon take a different view of applicants’ foreign travel history and plans when considering applications for life insurance. The National Association of Insurance Commissioners (NAIC) recently adopted new guidelines aimed at protecting consumers from discriminatory underwriting practices by life insurance companies in the sale of life insurance. The guidelines modify the NAIC’s Unfair Trade Practices Model Act to limit an insurance company’s ability to deny an applicant life insurance based solely on lawful past travel or lawful future travel (under particular circumstance on the latter).

The new guidelines state that future travel cannot be the basis for a coverage decision unless travel to a specific location at a specific time is found to create a risk of loss greater than that for individuals who do not travel to that place at that time. Such findings must be based upon sound actuarial principals and actual or anticipated experience.

The language implies there is plenty of room for ‘interpretation,’ and seems somewhat ambiguous. Specifically, it will be interesting to see how life insurance companies adapt and justify their findings based upon ‘sound actuarial principals and actual or anticipated experience.’