Posts filed under 'foreign travel'
For as long as I’ve been in the business, not quite 100 years but working on it, foreign travel has been fair game for life insurance companies underwriting criteria. In the words of an underwriter I spoke to several years ago, “it seems prudent for us to consider increased mortality risk for people that travel to unstable areas or areas that are known for unsafe health conditions”.
For as long as I can remember underwriters have used as their core base of countries that are automatic declines, those that show up on State Department travel warning list. When you look at this list you can certainly understand why your mother and most life insurance underwriters might have some concern. The problem that has surfaced lately and many state insurance commissions are addressing is, that while it may present a scary sounding list, there is no mortality statistics to back up a higher rating or decline in many instances.
An even sketchier issue arose when companies also took adverse action based on the travel alert list. This list is fairly short right now, but at times has been quite lengthy and has included countries that will just leave you shaking your head. On the list today are notably scary places like Mexico and China. One of the China alerts rightly suggests that you exercise caution in travel to the area of the country impacted by the recent earthquake. But the other alert simply alludes to the fact that foreign place are kind of scary and you might want to be very careful when you go there.
I believe the State Department is well intentioned in these lists, but when places like Mexico and, in the past, such notables as Belize and Costa Rica, are used by insurance companies as ways to rate life insurance applications, something has gone askew. I remember a case a few years ago being declined because of a planned vacation to Belize. When I asked the underwriter what he was thinking, he mentioned that Belize was on the alert list because of the danger of kidnapping and murder of tourists. My wife and I honeymooned there and have been back a few times since then. The fact is that a tourist had been robbed and killed several years before we started going there, making it 10-15 years prior to this underwriter’s action. We reapplied with another company and got the rates we expected to get the first time around.
Anyway, a shift is coming and in several states has already started. On the subject of foreign travel, in many states, a company now either can’t consider the foreign travel in their underwriting, or as part of any adverse decision, has to produce documentation to back up any perceived mortality risk.
I am for this and in some instances, against it. It will hopefully clean up petty issues like travel to Mexico, Belize and China, but in my mind the companies should have the discretion to refuse to accept the risk of someone traveling on vacation to Afghanistan. While vacation is probably not the right example, civilian workers and missionaries do travel to dangerous places in substantial numbers and the risk is real, not fabricated.
Bottom line. An independent life insurance agent can help you wind your way through the maze, and the truth is, in most cases, get foreign travel put in the proper context.
May 24th, 2008
If you are planning a trip to the Olympics this summer, it’s time for a life insurance checkup to make sure you are covered for foreign travel, and if you are considering increasing coverage before you go, you need to apply now.
Most life insurance you have in force will cover foreign travel as long as it was either not planned or admitted to at the time of the application. There is an assumption in all life insurance that opportunities will pop up and you should be able to take advantage of them without losing coverage. I used that very assumption last year when I went skydiving for my first and probably last time. The bucket list, you know!
If you are thinking about increasing coverage and are planning to go to the Olympics, you should act now. Make sure you have the policy in force before you go as companies aren’t real crazy about putting a policy in force when you are overseas. From a legal standpoint you are also supposed to accept, sign and pay for the policy while in the the states.
Bottom line. The good news is that there are quite a few companies that really won’t have a problem with you going to Beijing for a week or two (depending on travel warnings due to terror threats, etc). So, whether you are going to the Olympics or on an African safari, don’t wait until you’re packing your bags to decide to increase your life insurance.
March 19th, 2008
When you hear about life insurance company concerns with foreign travel, do you ever wonder where they draw the line?
I recently shopped for coverage on a corporate jet pilot that did a fair amount of overseas flights. The best offer came back with the caveat that “Flights to locations considered safe and not on any US travel warnings list”. Well, one company’s safe is another company’s worst nightmare. I remember a client being declined a few years ago because he was helping develop a golf course and resort in Belize and was spending too much time there.
Anyway, first stop is the State Department International Travel Site . Interesting place! From there to their International Travel Information, Travel Warnings section.
Some are obvious. I’m thinking that insurance companies aren’t going to be real wild about offering good rates to someone that will be flying into a place where surface to air missiles are a form of currency.
Others I will admit I’ve never heard of and have a bit of trouble pronouncing, like CôTE D’IVOIRE.
Not a name I’ve seen on the evening news. I did notice that Belize is not on the list. Whew! I personally think they should leave countries off the list if the snorkeling is good.
There is some travel that should be an obvious concern to the person going there and anyone considering insuring them. The truth is that the mortality experience getting to and from your own airport is probably higher than going to most of these Travel Warning destinations.
Bottom line. Like so many underwriting guidelines, the only thing you can count on is that no two companies will see it the same way. Time to check in with your independent life agent and shop the market.
October 19th, 2007
Over the years, North American Ccmpany for Life and Health has moved in and out of the impaired risk spot light. Overall though, they would have to be judged as one of the better small companies out there.
North American isn’t one of the big boys, but they are still here after 120+ years and there is something to be said for not going away. Having said that, there is a pretty significant rumor milling around that Midland National and North American will be merging soon. Attached is a summary of ratings and stats on both companies.
north-american.pdf
midland-national.pdf
North American has proven to be consistently formidable with the private pilot market. Other companies come and go, but North American has been steady there for years. They also underwrite toward the top of the stack on strokes and some cardiac issues.
In recent history they were leaders in the industry in underwriting type 2 diabetes and cancer, but have become more conservative on that in the past year or so. They have also taken a step backwards on sleep apnea. They are pretty middle of the road on these issues at this point. We are in the process of finding out what direction they will take if they do merge with Midland.
In my memory they have never been good with type 1 diabetes, multiple impairments such as diabetes and heart disease combined, or foreign travel.
Bottom line. One of the reasons that independent agents can be a valuable partner in your search for life insurance is that when a company changes their view on a certain impairment, we’re not stuck there. The winds are always shifting and flexibility is a good thing.
October 19th, 2007
I never stop looking on behalf of people who just can’t seem to get an offer on life insurance. I’ve literally work for years before finding a client the policy they needed.
Because I didn’t have a company that would touch it, I have literally had to turn down dozens of people who were headed to Iraq to work for civilian contractors. I have had numerous inquiries from people that were actually on the ground in Iraq asking about life insurance coverage.
First of all I would like to say that there is no substitute for good planning. These people should have had life insurance in force well before they thought about going to Iraq. They were all adults with responsibilities, which I think pretty much defines most people who should already have life insurance.
Having said that, once you actually accept a job in Iraq, the thought might even cross my mind that more is better. And now we have a way to meet that need. Some relatively easy criteria need to be met, but Iraq, Afghanistan, African countries that are life insurance nightmares, all possible.
Bottom line. It’s a dangerous world. Some places more than others. Most life insurance companies don’t want any part of your intended foreign travel to the dangerous places. I’ve found one that does!
September 21st, 2007
A recent article by the Anti-Defamation League expressed their pleasure about AIG, American General’s assertion that they do offer life insurance coverage for people who travel to Israel. This peaked my interest as I have run into some rather squirrelly foreign travel underwriting for AIG in the not too distant past.
I decided to get an opinion directly from their underwriters rather than the PR department that I am guessing handled the ADL inquiry. I went out for quotes to several companies using a scenario of a man and wife.
In my inquiry I indicated that the man traveled to Israel 3 to 4 times annually on business. He stayed 2 to 3 weeks each time. His wife had family in Israel and traveled there usually once a year for about two weeks.
AIG’s response taken from the email I received from their underwriting department was as follows: “She’s ok possible preferred plus. If his travel to Isreal exceeds 8 weeks
a year (which it appears it may) we’d offer at best standard plus with a
$1.50/k flat.” Ok. Hold that thought. I will turn that into actual numbers in a minute.
The same scenario got this response from West Coast Life, part of the Protective Life group: “No adverse action based on travel as indicated.”
Both companies appear willing to offer Mrs Traveler their best rates. I can’t fuss about that. Mr Traveler isn’t going to find AIG as friendly as the ADL does.
With West Coast Life, Mr Traveler, a 54 year old in perfect health will pay $2690 for a $1,000,000 20 year term insurance policy. Remember, “no adverse action”. Based on AIG’s underwriting Mr Traveler will pay a base cost of $4260 (standard plus) and $1500 ($1.50 per thousand flat extra) for a total annual premium of $5760.
To be fair, AIG didn’t say in the article that they would offer fair rates. All they said was that “it provides coverage for travelers bound for Israel”.
Bottom line. Get your life insurance advice from an independent agent and not from the Anti-Defamation League. It would seem that AIG told them exactly what they wanted to hear and just didn’t share all of the pertinent underwriting opinions.
August 5th, 2007
The discussion went smoothly. A wife looking for insurance to replace a term policy on her husband that was coming to the end of the guarantee. Good health. A little family history hiccup, but not a big deal. Then I asked about foreign travel and she said, well, yes he does travel. After a little beating around the bush it seems that her husband had become a little bored with retirement and had decided to do contract work….. kind of where ever he might be needed. He was currently in Iraq for 12 months. Wrong time to review his insurance portfolio!!
To all of you husbands/wives who have a husband or wife who is considering changing careers or taking up hobbies, review life insurance while it is still in the considering stage. Once plans are in place and commitments have been made, whatever is coming down the road will impact your life insurance.
A few examples might help clarify this. Let’s say I’ve always thought it would be kind of fun to take up skydiving, but I’ve always kept that in my someday file. If I buy life insurance and they ask me about skydiving, it’s not an issue. I have no set plans on when I might do it so it doesn’t impact my life insurance. If, on the other hand, I am scheduled to start skydiving lessons June 23, 2007, the answer is yes to the dangerous hobby question and it will impact my life insurance rates. Now, a good independent agent can minimize the impact, but it isn’t going to go away.
Like our example above, if I have always thought it would be fun, or exciting, or profitable to go for an extended stay to travel Africa, it doesn’t impact my life insurance if I have not actually started planning and scheduling or making commitments. If, on the other hand, I have started negotiating with a company to help sell water purification systems in Zimbabwe, I have to be honest about my future plans, and yes, it will likely impact my life insurance rates.
I discussed in another blog the fact that some states no longer allow life insurance companies to ask about foreign travel. Personally, I don’t see that stance lasting long. I really don’t see it growing past the 5 or so states that currently have that rule.
That’s not the point though. Review your life insurance with your agent annually. Share your “want to’s” with your agent so they can advise you at the right time. Whether it is foreign travel, skydiving, motorcycle racing or mountain climbing, after you have headed down that road is the wrong time to ask about the impact on your life insurance.
June 13th, 2007
