Foreign travel is one factor that insurers consider when evaluating life insurance applications. Remember that life insurance companies’ primary concern is assessing risk. With everything happening in the world today, it’s no surprise that insurance companies pose a higher risk to travelers.
Where you’re traveling and the length of it can impact the life insurance policy you receive or if you’re qualified. So, are you planning a trip abroad and considering a life insurance policy?
Below are things you should know.
How Does Life Insurance Underwriting Work?
Life insurance underwriters’ job is to determine how likely you are to die at any age. Yes, it’s pretty morbid, but they do this so that the company knows how much risk they’re taking on, what types of policies they can offer, and can decide whether or not to insure you based on the risk level.
It means you’ll be asked many personal questions about your health history, family medical history, lifestyle habits, and age when applying for life insurance. Also, you may need to take a medical exam.
Life insurance underwriting usually takes about four weeks and could go as long as six months. Some things that might happen during the process: They ask you more questions, find something new in your medical records, want more information from doctors, get an updated medical exam report back before approving coverage, or ask for a second opinion.
Why Is Foreign Travel Considered During The Life Insurance Underwriting Process?
The answer to this question is simple: travel can be a risk factor for death. Countries at war or with high levels of violence are often dangerous, which means high mortality rates. In addition, some countries have more diseases that are more likely to cause early death, such as malaria and yellow fever.
Foreign travel increases the chance of dying during the life insurance underwriting process. That’s why it’s considered when determining if someone will get approved for life insurance.
If you’re traveling abroad anytime soon, make sure you let your carrier know about your upcoming trip so they can weigh in on whether or not they want to continue processing your application.
Common Travel Questions You’ll Be Asked
During the application process, you’ll be asked about any previous and future foreign travel, generally within two years. For planned travel plans, you’ll be asked about the following:
- Where is your destination?
- What’s the purpose of travel?
- Is it repeated travel?
- How many times a year do you visit the said destination?
- How long is your trip?
Life insurance companies take a comprehensive approach when assessing travel risk on an application. That said, just because you’re going to a country deemed riskier than others doesn’t necessarily mean you’ll get a lower health classification.
It just means that you’ll get asked more questions about your trip. A foreign travel risk assessment may require additional documents, such as itineraries. Getting a life insurance policy with a foreign health classification is a matter of assessing your risk based on the information provided to the insurer, exploring other policy options, and finding an appropriate balance between price and coverage.
How Does Foreign Travel Affect Your Life Insurance Application?
As mentioned, underwriters look at different risk factors to decide whether you get approved for coverage. One of these is foreign travel. Insurance companies typically rate countries based on medical resources, sanitary conditions, political stability, and other considerations.
Low-risk destinations probably have all the necessary medical equipment and the ability to treat most illnesses that could arise during your trip. In contrast, high-risk destinations may lack access to necessary medicines and adequate healthcare professionals.
So, let’s say you intend to travel to a high-risk destination; this could pose limitations or restrictions on how much coverage you can get. On the other hand, traveling to a low-risk destination can give you flexibility about how much coverage you want.
Life Insurance Vs. Travel Insurance
Travel insurance protects you from the uncertainties and unpredictabilities of foreign travel. For example, if your flight gets delayed because of a storm, a cancellation waiver can help with any costs. Or if you may need urgent medical care.
However, it doesn’t cover your loved ones at home if you pass away during travel. That means no benefits and no payouts. On the other hand, having life insurance provides peace of mind for your family in case something happens while you’re abroad. So check with your life insurance agent about coverage before heading out on vacation!
While foreign travel does affect your life insurance application, take note that each insurance company treats this differently. So, depending on which company you’re going to, one insurer may offer you the most favorable coverage, while another could deny your application. Be sure to discuss these risks with your agent and find out what type of coverage is available before traveling abroad during the life insurance underwriting process.