Why life insurance companies need to know about your travel plans

Everything you need to know about why you have to disclose foreign travel during the life insurance underwriting process .

One unexpected factor that underwriters take into account when evaluating your life insurance application? Foreign travel. Where you’re traveling and for how long can impact the life insurance health classification you receive — or if you are eligible for a policy at all.

Here are the most commonly asked questions about life insurance and travel.

What information will life insurance companies look for during the application process?

During the life insurance application process you’ll be asked about any past and planned foreign travel out of the U.S. or Canada, usually within two years. For future travel plans, in addition to the destination, you’ll likely be asked about the purpose of the travel, the length of the trip, and, if it’s repeated travel, how many times a year you go to said destination.

Underwriters take a holistic approach when evaluating travel on a life insurance application, so just because you’re traveling to a locale that might be deemed riskier than others doesn’t mean you will automatically receive a lower health classification on your application.

Why is travel considered during underwriting?

When a life insurance underwriter evaluates your application, they’re looking for anything that might pose you as a risky candidate; this could be a family history of an illness, a medical condition, or a risky career choice, such as being a pilot.

Safety and health concerns are the two main proponents that are considered during the underwriting process. A country at war, or that has political instability, endemic disease, or lacks easily accessible hospitals increases the probability of endangerment if you were to travel there. A country with a higher mortality rate is going to be viewed with more scrutiny during underwriting, just as any other factor that leads to high mortality rates would.

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What destinations might impact my life insurance application?

Countries that are deemed high-risk by the US Department of State are likely going to face the same scrutiny from life insurance companies. This list is the result of a multitude of factors, such as the country’s crime rate, civil unrest, endemic disease, natural disasters, and current events. If you’re traveling to a country that is under a current U.S. Department of State travel warning, your application will be considered on a case-by-case basis and there is a possibility that it will be declined.

In an ever-changing global climate, countries that are currently considered high-risk could become safer to travel to, and vice versa. Restrictions put in place by life insurance companies will evolve to accommodate that.

Currently, most international travel is discouraged by the State Department due to COVID-19 and any international travel can cause either a delay or rejection in your life insurance application.

Historically, life insurance companies have not underwritten based on domestic travel and you should not see any impact on your life insurance policy if you are traveling within the United States or Canada.

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Why do insurers underwrite length of travel?

From an underwriting standpoint, the longer you travel, the longer you are exposing yourself to potential risks — and any increase in risk alters how insurance companies underwrite you. You’ll likely face tighter restrictions on how long you can travel to a country that is considered risky and still get life coverage than you would to a country that is deemed safe for travel.

Additionally, long-term travel outside of the country can indicate that your residency may actually lie outside of the U.S. and would be looked at by the underwriter with some skepticism. In this case, you’d likely be underwritten as a foreign national.

How long can I travel for before it affects residency?

Many life insurance companies will underwrite applicants who are traveling for over three months as foreign nationals or non-U.S. residents, which means you’d then be subject to different underwriting rules. Similarly to everything else, this timeline varies for each life insurance company and time abroad could be as high as six months for some life insurance companies.

If your application falls under the underwriting guidelines life insurance companies use for foreign nationals you’re still subject to the same stipulations they use for permanent U.S. residents — the safety concerns of the country of origin will be a determining factor in life insurance coverage. But there are additional restraints on the policy, such as occupational limitations and required documentation. Additionally, you might not be able to get certain riders.

How does travel affect my coverage?

Life insurance companies designate each country by levels and consider travel based on country code. Countries with minimal risk are usually classified as best class, while a country with some risk could get a standard plus rating. If you’re traveling somewhere perilous, you could be denied coverage altogether.

Dangerous travel is where you’ll see the most issues in purchasing a life insurance policy. If you intend to travel to a country that is classified as medium-to-high risk, this could pose limitations on how much coverage you can get. And if you’re purchasing a shorter term policy right before a trip — say five years — underwriters could view this negatively and as more of a precaution for your travels. The more dangerous the life insurance company views your travel plans to be, the more restrictive your eventual policy will be.

A life insurance broker like Policygenius can help you navigate your travel plans and what they might mean for purchasing a policy.

For the most part, yes, though there are some states that have legislation that prohibits life insurance companies from underwriting based on travel.

The following states have legislation that does not allow for life insurance companies to take any adverse action based on lawful foreign travel:

  • Florida

  • Georgia

The following states have legislation that does not allow for life insurance companies to take adverse action based on previous lawful travel:

  • California

  • Connecticut

  • Colorado

  • Illinois

  • Maryland

  • Massachusetts

  • New York

  • Oklahoma

  • Washington

Diplomats, embassy employees, and missionaries assigned to countries with a moderate to high level of risk will likely be denied life insurance coverage. Other careers that don’t require long-term travel but involve some level of risky travel, like a pilot with overnight stays in Mexico where there is a US Department of State travel warning, would get coverage on a case-by-case basis that is up to the underwriter’s discretion.

Does life insurance pay out if you die overseas?

Similarly to most other causes of death, as long as you were honest during the application process about any known travel, your life insurance company cannot deny your beneficiaries the death benefit if you die overseas. If you disclosed planned travel to a country on the travel warning list and were still able to get a life insurance application, the insurer cannot later contest the death benefit because you did not misrepresent your plans on your application.

Similarly, if you travel to and die in a country that was not on the travel warning list at the time of your application but was later added, your beneficiaries would still receive the death benefit. Insurers cannot disqualify the death benefit claim due to a changing of global circumstance.

Simply put, as long as you’re honest on your life insurance application, the insurer will pay out the death benefit, though some additional documentation might be required by the life insurance company. Otherwise, the death benefit claims process shouldn’t differ too much from its normal process.