Do You Know the Best Life Insurance Companies for International Travel?
All life insurance companies look at international travel differently.
Some life insurance companies will really penalize or even decline your life insurance application for world travel.
However; depending on the state you live in, some states may not even be able to consider where you are planning to travel, no matter where you are going!
These are known as state exceptions, and I’ll explain them later.
QUICK ARTICLE GUIDE
- Foreign Travel Defined
- How Insurers Determine Risk
- Foreign Resident of Non-Resident
- Missionary Travel
- Purchase Requirements
- Travel to Mexico
- Dangerous Countries
- State Exemptions
- Supplemental Travel Insurance
How is foreign travel defined?
Every insurance company’s definition of Foreign Travel will vary slightly, but the most common guidelines typically classify foreign travel as “Conventional or business travel outside the United States or Canada for up to 3 months each year.”
For Foreign Travel less than 3 months per year, the insurance company will consider the applicant’s; occupation, frequency of travel, purpose of travel, and time spent in each country.
Travel for more than 3 months per year is underwritten as Foreign Residence or Non-U.S. Residence and these rates can vary depending on the country or countries you will be visiting or residing in.
The insurance companies consider the risk to their client based on where they are traveling.
Insurance companies consider economic conditions of the country, disease, standards of public health and sanitation, availability of hygienic medical facilities, and cultural attitudes towards general health and safety. State Department warnings are also considered.
If a country in undergoing a civil war or if there is ongoing military or civil unrest, these countries are considered to be dangerous and are a higher risk and typically present a larger challenge in underwriting.
Insurance companies also look at the length of time before your trip is scheduled. If you are purchasing the insurance within a month or two of travel, the insurance company will look at these factors more carefully.
In fact, some companies will even postpone your application until you return. For these reasons, if you know you have an international trip planned and you want to be insured before you go, start the application process as early as possible.
What if you travel more than 3 months a year?
Life insurance for world traveller for more than 3 months a year outside of the U.S. will cause the insurance company to underwrite your policy as a Non-U.S. Resident.
This can also apply to someone who lives outside of the U.S. but visits the U.S. periodically.
An example of this is a client I met last year, I wrote a policy for someone who grew up in the United States but moved to Germany to work for an automobile manufacturer. My client has 2 college-aged daughters that are students within the U.S. and he wanted to make sure they had insurance while they were in school if something were to happen to him.
Another example of a Non-U.S. Resident would be an exchange student or someone living within the U.S. for a temporary basis to complete business training. Lastly, the insurance companies will consider someone who lives within the U.S. part of the year a Non-U.S. Resident.
For example, someone who is an Australian Citizen but they live in their vacation home in San Francisco for 3 months each year would be considered a Non-Resident, but this does not keep them from being able to purchase life insurance from some of the specific companies we work with.
In addition to these guidelines, insurance companies also underwrite missionary travel differently.
Missionary work is often a decline with most life insurance companies. This is because missionary travel is usually to areas that are impoverished and lack sanitary and current medical facilities.
Also, the nature of the work itself may be considered a threat by the governments or citizens of the countries missionaries travel to. An example of this in recent years is the case of John and Wanda Casias.
Mr. and Mrs. Casias were serving as missionaries in Monterey, Mexico an area considered to be extremely dangerous due to the fighting between the drug cartels that peaked about 4 years ago.
This happened just months after Nancy Davis and her husband were murdered in an illegal road block that was suspected to be the work of the Mexican drug cartels. Unfortunately, these situations are all too common not only in Mexico but other countries as well and this can present some challenges when applying for life insurance. (See Travel to Mexico.)
In each of these situations, we can typically find insurance companies that would be willing to accept the policy, but there are some additional guidelines that must be met.
The individual must be within the U.S. legally when they apply for insurance.
The individual applying for the insurance must complete:
- All parts of the application,
- Medical exam, and
- Completion of the contract with signatures within the United States.
In addition, the insurance companies want to see that the applicant has some ties to the United States like employment, family, or property ownership.
Also, make sure your country of citizenship is not one of the countries that prevent their citizens from buying life insurance outside of their home country.
These countries include; Argentina, Belgium, France, Greece, Japan, Panama, Poland, Switzerland, Uruguay and Venezuela.
For life insurance for world traveller, some countries have been deemed too dangerous to travel to. A country that comes up very often for travel consideration is Mexico.
Travel to Mexico typically affects about 20% of our clients each year. Unfortunately in Mexico, U.S. citizens seem to be the target of a number of crimes.
According to the U.S. Department of State, “The U.S. Department of State warns U.S. citizens about the risk of traveling in Mexico due to threats to safety and security posed by Transnational Criminal Organizations (TCOs) in the country. U.S. citizens have been the target of violent crimes, such as kidnapping, carjacking, and robbery by TCOs in various Mexican states.”
The U.S. Department of State also goes on to list the regions of Mexico are deemed to be the most dangerous and least dangerous. This information was last updated in January 2014, and remains in effect today.
Because of an active State Department warning, life Insurance companies have determined that the risk of traveling to Mexico is more dangerous than not traveling to Mexico, and this can have an effect on the price of your policy or even cause your policy to be declined. (See U.S. State Department Current Travel Warnings)
Every company views travel to Mexico differently. Some companies have a zero tolerance policy, any travel to Mexico is an automatic decline for life insurance. Other companies are mostly concerned with areas along the border where the cartels are most active.
A client driving through Mexico will be a decline with almost every carrier, but a client that is flying directly into a resort city and staying on the resort for the duration of their stay may be able to get a policy with no additional rate consideration.
Because the guidelines for travel to Mexico are changing every few weeks and changing with each insurance company; please call us to get the most accurate and up to date information or visit current Mexico Travel Warnings.
While Mexico tends to fall in a bit of a gray area with the insurance companies, travel to some countries is much more black and white. There are countries that are listed as declines with all carriers. These countries are usually on the State Department warning list and may also have economic, political, or social unrest.
Some of these countries currently include:
- North Korea,
- Parts of Africa,
- Gaza Strip (Palestine),
- Afghanistan, and
In these situations however; we may still be able to find an insurance policy based on the state you live in. Some states have passed laws that prevent insurance companies from looking at past or future travel.
A few months ago I met a client who is retired but travels to Uganda each year for 3 months with his church to place bibles in hotels and other public places.
This is not the type of a client the insurance company would jump up and down for, in fact, all companies would have declined this individual just because of the fact he was traveling to what is deemed to be a very dangerous area (not only politically but also because of lack of sanitary medical facilities) for an extended period of time.
My client happened to be from Colorado, and this is what allowed us to find a policy for him even though he is also considered a missionary with the Gideon’s. As I mentioned earlier, some states have what are known as “state exemptions” for life insurance.
The state of Colorado and other states including but not limited to Florida, Georgia, Washington, Maryland, and New York have passed laws that prevent an insurance company from considering the applicant’s past or future travel, or both no matter what the purpose of the travel is.
These laws vary by state, by insurance company, and can change from time to time with legislation. The state exceptions started about 8 years ago when the Life Insurance Fairness for Travelers Act of 2007 was presented to Congress.
The bill was designed to keep life insurance companies from declining applicants who were traveling to countries deemed to be dangerous. Although the bill did not pass, it led a number of states to enact their own version of the bill. Read more about the Life Insurance Fairness for Travelers Act of 2007.
What If I’m Already Insured?
Another subject some of my client’s ask about is:
“What If I already have life insurance? Will it pay my family if something happens to me while I am overseas? What if I am in a dangerous country?”
The answer is yes, but the policy must have been issued, approved, and put in force prior to the international trip.
You must be honest about your travel. If the trip was planned prior to applying for the life insurance it must be notated on your policy. If the travel was not planned prior to applying for the life insurance, the policy will pay as well.
Some of my client’s also ask about supplementing their existing life insurance with an accidental death policy.
These policies are very inexpensive and are approved within 2 days. An accidental death policy will pay out on top of what the life insurance pays, but only if the client dies in an accident. These polices can be canceled once the client returns to the United States with no penalty.
An accidental death policy is much more lenient with approval because it will not cover health related death, only death that is the result of an accident. Because of this I generally do not recommend supplementing your existing life insurance, perhaps Neal Frankie of U.S. News says it best on his Money Blog;
“This coverage is very cheap for good reason. Most people arrive at their destinations safely, and very few get into terrible accidents. And what does it matter how you die, by the way? Why would your family need more life insurance just because you died in an accident rather than from an illness? I know this sounds crass, but this insurance makes no sense. Rather than throw your money away on these policies, have an extra-large, fresh-squeezed orange juice at the bar while you are waiting for your flight. You’ll live longer.”
What company is the best for people who travel for business?
It depends on a variety of factors, where you are traveling to, for how long, and why?
We have all of the underwriting guidelines for each insurance company, and we work with more than 40 companies.
If you think you might fall into any of these categories, please feel free to give us a call at 855-247-9555.
We will shop the market and compare the current state exception guidelines for you to see which top-rated insurance companies are available to you.
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