UPDATED: May 14, 2020
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Americans love to travel. Some of us are regular jet-setters who travel for business while others travel less frequently. And traveling internationally brings its own set of challenges such as having a valid passport, bringing enough money and knowing the conversion rates, and carrying the right type of adapters for your electronic gadgets. Then there’s the whole issue of travel insurance. Will you be able to get qualified health care if you need it?
And what about term life insurance? Of course, you’re planning on coming home safely, but you don’t want to risk it. If you find yourself without coverage before a big trip, these steps will help you get a policy in place before stepping onto a foreign land.
Determine Your Destination and Trip Duration.
Life insurance companies assign codes to countries based on the safety of travel to that country. They consider many factors including war or conflict, famine, disease, limited access to medical care, political instability and economic issues. The companies then develop their underwriting guidelines based upon the code categories each country fits within. Safer countries will have few, if any, travel restrictions. More dangerous countries will carry heavy restrictions. And countries on the U.S. State Department’s travel warnings list will almost always result in the company declining your application.
This table provides an overview of how this code system works. Please note it’s not a guarantee of coverage, as these codes vary by company and change continuously.
|Australia||A||Best Class as Qualifed|
|China||B||Best Class as Qualifed|
|Saudi Arabia||C||Best Class as Qualifed|
|Lebanon||D||Best Class as Qualifed|
|Syria||E||Decline or Postponed|
The duration of your trip also impacts the rating class you may receive for your policy. Shorter trips of less than eight weeks or so are acceptable. However, longer stays could mean your policy will cost more money.
|Country Code||Less than 8 Weeks||More than 8 Weeks|
|A||Best Class as Qualifed||Best Class as Qualifed|
|B||Best Class as Qualifed||Standard Plus|
|C||Best Class as Qualifed||Standard|
|D||Best Class as Qualifed||Standard + Extra Charge|
|IC||Individual Consideration||Individual Consideration|
Be Sure to Research Term Life Insurance Companies.
Life insurance companies have guidelines they use for foreign travel. And like all other guidelines, they vary by company. Some are more lenient with foreign travel than others. Depending on your destination, you may need to find one of these companies.
Finding information online about life insurance companies is easy to do. There are thousands of websites available. The problem is there’s little in the way of specific information about company guidelines related to foreign travel. One reason is the guidelines change regularly based on global conditions. For this information, you’re better off talking with an experienced life insurance broker who can identify a company with guidelines that fit your travel situation.
Complete Your Application and Purchase Your Policy Before the Trip.
The term life underwriting process takes time. As in 3-4 weeks on average. If you have an upcoming trip planned, prepare accordingly and get your application submitted early.
Be truthful on your application as you don’t want to give the insurance company any reason to deny a death claim. Be as accurate as possible about your travel plans. State how long your trip will be and exactly what cities/towns you will be staying. Worse case scenario is your application may be postponed by the company until you return. This is more likely to happen if you are traveling to a country on the warnings list.
If possible, do not leave for your trip until your policy has been approved and placed in force. You must receive and sign for your policy in your state of residence, so if you fly off to Europe before your policy is approved, it may not be in force until you return home. There are some exceptions to this rule depending on the company you apply with and if you prepaid for your policy or not.
Out of Time?
If it’s clear you do not have time to get a traditional life insurance policy in force before your departure date, consider a no medical exam term life insurance policy. No medical exam term does not require you to complete a paramed exam, which will save you valuable time. The entire application process is done by telephone with an electronic signature, meaning you can have your new policy in force within 24-48 hours.
But as with regular term life insurance, if you are traveling to an unstable country, you will likely have to wait until you return from your trip to get life insurance.
Several states have adopted legislation that restricts life insurance companies from using past foreign travel as the sole reason for declining an applicant. This trend was started by the Life Insurance Fairness for Travelers Act of 2007. The bill was not enacted. However, it spurred similar legislation in these states: CA, CO, CT, FL, GA, IL, MA, MD, NJ, NY and WA. Also, FL and GA state laws prohibit life insurance companies from taking any negative action on an application based upon future travel plans. As a result, many companies do not even ask travel related questions on their applications in those states.
If you are a resident of one of these states, your application could be affected by this legislation. This is a good thing for you as the purpose of these laws are to protect you and help you get life insurance regardless of your foreign travel history and plans
Traveling to foreign countries is exciting. There’s a lot to think about ahead of your trip. Plan accordingly and you can enjoy your adventures to the fullest knowing your life is insured.
Life Insurance and Foreign Travel Update
It has been a while since we last blogged about this somewhat sensitive subject (sensitive to the life insurance industry anyway). In the meantime, the list of states that do not allow the use of foreign travel history or plans to be used in determining the eligibility of a life insurance applicant has grown to a total of ten. The list now includes the following states:
- New Jersey
These states do not allow life insurance companies to take adverse action based solely on the proposed insured’s past or future lawful travel. They do, however, allow life insurance companies to ask questions on their applications about such travel for the purpose of actuarial research. The lone exception is Florida, which does not allow any reference to foreign travel whatsoever on life insurance applications used in that state.
The life insurance underwriting landscape is changing rapidly regarding foreign travel guidelines. Since 2005, several states have passed legislation prohibiting or restricting the use of foreign travel plans for underwriting purposes.
While still open to interpretation, most insurers have responded to the legislation by avoiding adverse underwriting actions based solely on a proposed insured’s past or future lawful travel in those states where it is now prohibited. These states currently include California, Colorado, Connecticut, Florida, Georgia, Louisiana, Massachusetts, and Washington.
Life insurance companies are allowed to include foreign travel related questions on their applications in all states except Florida. Many continue to collect this information, even if only for data collection and research.
In those states where no related legislation exists, life insurance companies continue to scrutinize the foreign travel history and plans of proposed insureds. While guidelines vary by company, it is safe to assume that if the planned destination is found on the U.S. State Department’s Travel Warnings List, the application will be declined.
Most life insurance companies have extensive lists of their own that include other countries likely to be declined, as well as acceptable countries. If you have foreign travel plans or travel regularly, it is best to provide this information up front and allow our representatives to contact several companies on your behalf. Doing so will help secure the lowest premium possible for your circumstances.