You can get disability insurance if you maintain a residence in the U.S. for at least six months. Your options are more limited if you're away longer than that.
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Disability insurance can replace your income while you’re unable to work because of an illness or injury. That means any injury or illness you incur while traveling abroad could make you eligible to receive disability insurance benefits, as long as the illness itself or the cause of the injury is not excluded in your policy.
However, your options for disability insurance coverage are more limited if you plan to be out of the U.S. for longer than six months. Although individual consideration is given on a case-by-case basis, most insurers require you to maintain a residence in the U.S. for at least six months out of the year to be eligible for coverage. If you’re planning to become an expat, you may need to purchase disability insurance before you leave the U.S.
If you’re not eligible for disability insurance because you live abroad, you have a couple of options: you can shop around until you find an insurer who will cover you, or you can file a claim for Social Security disability insurance if you meet the agency’s definition of disability.
If you have disability insurance before you travel abroad, then you’re covered by your policy wherever you are, as long as it’s not a war zone or a hotbed of terrorism and political instability.
You’ll be able to claim benefits from any disability you suffer while in a qualifying country, whether you’re traveling for business or pleasure. However, as we’ll see in the next section, you may not be able to get coverage if you live in the foreign country.
If you have disability insurance before you leave the U.S., you may not be able to use it when you become disabled in an international location if you’ve been away for too long.
During the application process, you’ll be asked how much you travel each year. While carriers use different underwriting guidelines, in general, you can usually only receive a standard disability insurance policy if you travel less than three months per year.
If you plan to be away from the U.S. for more than three months of the year, your disability insurance policy may have a foreign travel exclusion rider, which excludes from coverage the countries you plan to be in. Also called a foreign travel amendment, its terms will prohibit benefit payments for any disability you incur while traveling in an excluded country.
People who live outside the U.S. for more than six months may not be eligible for coverage at all. Not only will you likely be rejected if you apply; if you already have coverage, most carriers will also prohibit you from filing a claim until you’ve been back in the U.S. for at least six months.
However, U.S. citizens who live and work abroad for more than six months of the year may be eligible, which will be determined by the disability insurer on a case-by-case basis. For more information, or to get help finding a disability insurance policy that will cover you while you’re in a foreign country, talk to a licensed representative at Policygenius.
If you have disability insurance and become disabled while abroad, you should be able to file a claim from the foreign country. However, your claim won’t be completed until you’re examined by a physician in the U.S., and you may not be eligible to receive benefits until you’ve been living in the U.S. again for six months.
Insurers do vary on this condition, so if you shop around for disability coverage before signing up, you may be able to find a carrier with more lenient restrictions for filing a claim and receiving benefits while abroad.
If you’re living in a war zone or an area in the middle of an armed conflict, you won’t be able to get coverage. Depending on the insurer, some “remote” or “unsettled” locations will also be automatically excluded from coverage. In general, you should have access to quality health care in the event of an injury or illness.
Are you retired and ready to visit every country on your bucket list? You can still get disability insurance coverage as long as you’re under age 60. The same restrictions apply: you need to live in the U.S. at least six months of the year, and you can’t get coverage if you’re in a dangerous location. The disability insurance company will consider your occupation to be “being retired” – with all that entails – when deciding if you’re disabled enough to receive benefits after a claim.
Note that the earlier you apply for disability insurance, the more affordable it will be. That means disability insurance is cheaper for people trying to go FIRE, but could be prohibitively expensive if you retire at the more conventional age.
People from international countries living in the U.S. are treated just like citizens when it comes to applying for disability insurance, as long as they maintain a residence on U.S. soil. Applications will be decided on a case-by-case basis.
To get disability insurance as a foreign expat residing in the U.S., you usually need to have one of the following:
Permanent residency (green card)
H-1B visa, temporary worker in a specialty occupation
L-1 visa, intracompany transferee
J-1 visa, student, professor, or scholar cultural exchange
O-1 visa, for extraordinary talent
TN visa, nonimmigrant work authorization for citizens of Canada and Mexico
Disability insurance replaces around 60% of your pre-tax income while you're disabled and can't work.
Social Security disability insurance (SSDI) is a government program that pays out benefits if you become disabled, just like commercial disability insurance but without having to pay premiums. However, it has significantly lower benefit payments and rejects roughly 67% of applicants. A private disability insurance policy, if you’re eligible for one, will provide the most coverage to replace your income when you’re disabled.
But one advantage SSDI has over commercial disability insurance is that it covers you in almost every country no matter how long you plan to stay there. That means if you’re receiving SSDI benefits, you can continue receiving those benefits as long as the Social Security Administration is able to send payments to that country.
The two countries where you can’t receive SSDI payments under any circumstance are North Korea and Cuba. Certain restrictions apply if you’re in Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, Ukraine, or Uzbekistan.
In order to keep receiving SSDI benefits, you need to report your change of address once you settle abroad, as well as any change in your disability or employment. (Earning above the maximum amount – what’s called “substantial gainful activity” – could cause your SSDI benefits to end.) You’ll also need to report some changes in your immediate family, including getting married or divorced, or when you’re no longer caring for a child in your household.
You may be eligible for SSDI benefits even if you’re not a U.S. citizen as long as you’re in the U.S. legally. Beyond meeting the SSDI’s strict definition of disability, you only need to have worked at your job for a long enough time, as measured by the government’s eligibility requirements.
Additionally, if you’re a citizen of another country and receive SSDI benefits, you may be able to continue receiving benefits even if you leave the U.S. As of October 2018, citizens of 25 countries, including Austria, Poland, Portugal, Japan, and the Czech Republic, who live outside the U.S. and receive SSDI benefits may continue to receive benefits for as long as they remain eligible.