How Does Traveling or Living Abroad Affect Life Insurance Rates

Insurance companies are careful about underwriting applicants who plan on living or traveling abroad in the future.  With everything going on in the world today, it is no surprise that certain countries pose a higher risk to travelers and residents.   Insurance companies generally classify countries on a scale that will determine if any additional underwriting consideration will be required.   If you are planning on traveling to a foreign country to visit or reside, it is best to know how it might impact your rates.

Travel Questions on the Application – When you fill out an application for life insurance, it usually asks whether you plan to travel or live outside the US or Canada in the next two years.  If you answer yes, you will most likely have to fill out a foreign travel questionnaire with your application.  The questionnaire will ask the following questions so that the insurance company can determine potential risk.

• Where do you plan on traveling? Are you staying in urban areas or areas that are more remote?
• What is the duration of the trip?
• What is the purpose of the trip? Is it  work related or personal? If work related, what are your duties?

The insurance company will take this information into consideration to ultimately make a final decision on your health risk rating. It is important to note that it usually takes about 3-4 weeks to get a fully underwritten life insurance policy in force, assuming that your medical records are not required.  If your medical records are requested it could take much longer.  That said, you should plan accordingly and start the application process well in advance of any trip you might be taking outside of the country.

Country Ratings – As mentioned previously, insurance companies usually rate countries on a scale.  Life insurance companies generally rate countries based on attributes such as economic conditions, political stability, sanitary conditions and availability of medical resources.  For instance, an insurance company could use ratings such as A, B, C, D, with “A” being the lowest risk and “D” being the highest. Each insurance company will have its own rating on each country throughout the world, but here are a few examples to give you an idea.

• Examples of countries that are “A” rated would be Italy, Germany, Australia, United Kingdom, France.
• Examples of “B” rated countries would be Israel (excluding certain parts like the West Bank), Mexico, Kuwait, Costa Rica.
• Examples of “C” rated countries would be Philippines, Venezuela, Colombia, Bolivia.
• As mentioned before, countries that are rated “D” are considered the highest risk. Some “D” rated countries are Afghanistan, Liberia (along with many other countries in Africa), Iran, Iraq, Ukraine and many more. Some insurance companies might flat out deny coverage if you plan to visit or reside in a country that is “D” rated while others might use individual consideration.

The ratings used by insurance companies might change from time to time based on geopolitical events.  The US State Department posts travel advisories on a regular basis that might impact the rating insurance companies give to certain countries.

How the Insurance Company Might Handle Regular Travel –  In consideration of your particular situation, an insurance company could limit the amount of your coverage, limit the health rating you can get (i.e. nothing better than a “preferred rating” in a class “C” country), add a flat-extra or deny you coverage depending on which country is in question and the length of stay.  They might also stipulate that you must live in a major city within that country to be considered for coverage.  If you plan to work abroad, some insurance companies might deny you if you are a foreign correspondent, diplomat, missionary worker or security personnel.

Be Truthful on Your Application – Insurance companies want you to disclose all of your planned travel so that they can properly underwrite your case.  As always, be honest on your application if you plan on leaving the country for any period of time.  If something were to happen to you while you were out of the country on a planned visit to a dangerous country and you didn’t disclose it on your application, the insurance company could deny your claim.

Conclusion – Not every insurance company rates travel the same.  If you are interested in life insurance and you plan on traveling or living abroad, we can help you get the best rate.  We have access to over 40 insurance companies and will use all of our resources to get you the best coverage option available. Please feel free to give us a call at (888) 687-9444 or email us at info@archstoneagency.com if you have any questions.

Archstone Insurance Services, LLC is an independent agency that shops over 40 of the top life insurance carriers to provide huge savings on life insurance coverage for our clients.  We are happy to answer any questions you might have about any of the insurance products we offer, your planning needs or your existing coverage.  Feel free to call us directly at (888) 687-9444 or email us at info@archstoneagency.com.  You can also visit our website at www.archstoneinsurance.com.