If you are planning to travel abroad, your life insurance rates and eligibility could depend on the nature and duration of your trip, as well as your destination.
Considering a life insurance policy and a trip abroad?
If so, your travel plans may come into play.
Since life insurance companies are concerned with assessing risk, you can expect your life insurance application to ask about foreign travel.
Understanding how traveling impacts your access to life insurance can help you get the coverage you need.
Table of Contents
- Do You Need Life Insurance for Traveling Abroad?
- Should You Get Life Insurance or Travel Insurance?
- Can Travel and Life Insurance Be Combined?
- What Travel Questions Are on the Life Insurance Application?
- Why Do Life Insurance Companies Consider Traveling?
- What Countries Are Considered High Risk?
- What States Base Underwriting on Travel?
- Can You Buy Life Insurance in Other Countries?
- How Long Can You Travel Before Your Residency Is Affected?
- What High Risk Jobs Affect Life Insurance While Traveling?
- Will Your Policy Pay Out if You Pass Away Traveling Abroad?
Sometimes a trip overseas can prompt people to consider their family’s wellbeing if something goes wrong.
Whether you have life insurance in place already or are considering buying a policy for the first time, you should look beyond your upcoming trip to determine your coverage needs.
We don’t advise buying a life insurance policy or increasing your existing coverage solely because of your trip.
Why? Because the odds of a U.S. citizen dying while traveling abroad are slim.
The National Travel and Tourism Office reported that 44.8 million Americans traveled abroad in 2019.
According to data from the U.S. Department of State, only 650 of those travelers died while overseas, putting your chances of surviving a trip abroad at 99.999%.
While you don’t necessarily need life insurance for traveling abroad, most adults need life insurance in general.
Traveling or not, you should buy life insurance if:
- Someone depends on you financially
- You have debts that won’t die with you
- You need help paying for your funeral
It’s important to understand the differences between life and travel insurance before you purchase either ahead of traveling.
Here are a few key distinctions:
While some policies come with living benefits, life insurance is primarily designed to provide for your beneficiaries after your passing.
Travel insurance is made to protect you from financial losses if your trip is canceled, delayed, or interrupted due to a covered reason.
Some travel insurance policies can also reimburse you for medical emergencies, evacuations, lost luggage, and transportation.
When you apply for life insurance, you’ll answer several questions about your health, family health history, and lifestyle.
Traditional policies require a medical exam, while no exam policies rely on your responses, accessing your medical records as needed.
All of this information helps the insurance company determine whether or not to insure you and plays a significant role in setting your rates.
The process can take anywhere from a few minutes to a few months.
When you apply for travel insurance, they’ll simply ask for your:
- Non-refundable trip expenses
- Coverage amount
- Number of travelers covered by the policy
- Trip details
Once you’ve entered this info, you should be able to buy a policy on the spot, with cancellation coverage taking effect in 24 hours.
If you plan to add extensive emergency medical protection to your policy, the insurance company might ask for your medical records or a letter from your doctor and could exclude your pre-existing conditions.
Depending on the type of policy you choose, your life insurance coverage could last anywhere from a year to the rest of your life.
Term life insurance is the most popular kind of coverage, with 10, 20, and 30-year terms that can be tailored to meet your needs at various stages of life.
There are also several permanent policy options geared towards long-term needs.
As long as you stay up to date on payments, which are usually monthly, your policy will stay active.
Travel insurance policies are short term, designed to cover individual trips. They can typically be purchased for anything from a weekend trip to a year abroad.
You usually purchase travel insurance upfront, though some companies may offer installment payment plans.
While you can’t tack true life insurance coverage onto your travel policy, a few life insurance features can be added to your travel plan.
If you lose your life (or a limb) due to the following circumstances, your family could receive some benefits:
- Accidental death/dismemberment
- Death/dismemberment on public transportation
- Death/dismemberment on a flight
Note that exclusions may apply to the benefits above, such as situations involving pre-existing conditions.
Though this coverage can be a nice add-on to your existing travel insurance policy, it isn’t adequate for most people’s life insurance needs.
If you need life insurance, you should be able to secure a more robust policy that isn’t limited to accidents abroad, at a reasonable monthly rate.
When you apply for a life insurance policy, your past and future travel plans will come up.
The application will most likely ask you to list any past or planned trips outside of the United States and Canada within two years of the application.
For future trips, underwriters will want to know:
- The destination
- The reason for your trip
- How long you’ll be traveling
- How frequently you travel there
The life insurance company’s main goal in the underwriting process is to pinpoint anything that could put you at an increased risk of dying.
That’s why they ask so many questions about your health conditions, job, hobbies, and travel plans.
Though your odds of dying abroad are low, traveling to notoriously dangerous locations or engaging in hazardous activities can elevate your risk level.
High risk applicants can be denied coverage or be placed in a special rating class with higher premiums.
Most people’s travels don’t influence their insurability, but perilous plans can.
In addition to worrying about your planned activities overseas, they will also be concerned with factors like:
- The political climate
- Accessibility of hospitals
- Mortality rates
If you’re traveling to a country that increases your odds of dying, you can expect it to impact your access to affordable coverage.
That being said, travel is only one of several factors that underwriters address.
Just because you’re traveling to a country that’s a little riskier than home doesn’t automatically mean higher rates or a rejection letter.
While carriers evaluate applications on a case-by-case basis, you can predict which countries are most likely to influence their decision on your application.
Underwriters keep a close eye on data from the U.S. Department of State to determine which countries could be of concern.
Countries with a Travel Warning from the Department of State are most likely to result in you being declined for coverage.
At the time of writing, the countries below have a “Level 4: Do Not Travel” warning:
- Burkina Faso
- Central African Republic
- French Guinea
- French West Indies
- North Korea
- South Sudan
- The Kyrgyz Republic
Though there has been some controversy over the legality of blocking individuals from life insurance based on where they travel, it is legal in most states.
Most of the time, legislation regarding travel-based underwriting comes down to the state level.
It is legal to underwrite policies based on applicants’ international travel plans in all but a handful of states.
The states below provide varying levels of protection for travelers applying for life insurance, based on their prior and future travel plans:
- New York
If you already have a life insurance policy in place, check the terms before planning a long-term trip overseas.
When you shift from a short-term trip to living abroad, it could impact your life insurance coverage.
While some companies won’t change your policy if you move overseas, others may increase your rates sharply depending on where you’re going.
If you haven’t purchased a policy yet and know you’ll be living overseas in the future, there are plenty of U.S. and internationally-based carriers that could meet your needs.
Compare quotes and consider speaking to an independent agent to determine your best options.
Underwriters typically evaluate your application differently when your travel plans exceed three months, with some companies going up to six.
At that point, you’ll be considered as a foreign national or a non-resident.
You may still be able to get coverage, but the underwriting terms might be different.
Once again, factors like the safety of your destination and your activities there will play a huge role in determining your rates and eligibility.
Your policy may exclude some high risk occupations, and your rider options might be limited.
Some industries are considered to be risky at home or abroad, like underground mining and commercial fishing.
Others are more closely tied to location.
If one of the jobs below takes you to high risk countries, you could face higher rates or be declined for coverage:
- Embassy staff
Carriers may insure you on a case-by-case basis.
For instance, an airline pilot should be able to get approved but may face increased rates if they have to stay overnight in countries with a travel warning.
Remember that each life insurance company has its own standard when it comes to travel and underwriting high risk careers.
You may be declined by one carrier but approved by another with special rates or exclusions.
Honesty is key when it comes to ensuring your life insurance policy will pay out.
As long as you were truthful in your application and disclosed any travel plans that you had at the time, your loved ones should still receive your policy benefits.
If your insurance company approved your application and you answered the travel questions honestly, they cannot contest the death benefit.
Whether an unexpected trip came up or you’re traveling to a country that has been upgraded to high risk since the time of your application, you’re covered.
Under these circumstances, a bit of extra documentation may be required for verification, but your loved ones should face a smooth claim process.