In the process of completing life insurance applications with our clients, we sometimes run into situations regarding foreign travel and residency. Life insurance underwriting for a client involving foreign travel and/or who resides overseas or is residing temporarily in the United States typically requires a special questionnaire to capture more specifics about the applicant’s situation.
Foreign Travel Risk
Insurance policy pricing is based on mortality risk. Part of the risk built into U.S. life insurance policies is based on risk statistics in this country. Foreign countries present different risk statistics than ours (e.g. crime, access to health care, terrorist activities) and when the risk is higher than ours, the underwriter might assess a higher premium. In some cases, as in travel to Cuba or Iran, the application might be declined (or postponed until after the travel to dangerous countries.
Countries are rated according to each insurance company’s analysis of the risk factors present in each country. The rating will determine if coverage is available and, if so, what rate class will be assigned and/or how much extra charge will be assessed. Note that some states restrict insurance carriers’ negative view of travel.
Foreign Nationals are individuals living in the U.S. who do not have U.S. citizenship. This includes those with permanent resident status (green card holders) and those with temporary visas. Permanent residents who have a long history in the U.S. who intend to reside here permanently may only need to complete a foreign travel questionnaire. Those with temporary visas will also have to complete a foreign national questionnaire, which includes questions about the need for U.S. insurance, visa type, permanent residency intentions and travel plans.
I often get requests for life insurance for U.S. residents living outside the U.S. In my experience, these requests present several problems. First of all, most insurance companies won’t write policies for those living outside of the U.S. Even if they did, all aspects of the sale, including application, medical exam and policy delivery, must be completed in the U.S. The medical records needed by the insurance company would have to be translated into English. Also, the U.S. government may restrict sales to residents of some companies (e.g. Cuba and Iran).
The reliability of an underwriting opinion depends on the information provided. We work with our clients to ensure that the proper questionnaires and additional information are presented properly to the underwriter. If you fit into any of the categories above, contact us to discuss your particular situation so we can make sure you apply with the company that will best understand your needs.
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