May 23rd, 2006 by Megan Mahan
Could your foreign travel plans affect your life insurance premiums?
According to the Insurance News Network, the National Association of Insurance Commissioners (NAIC) recently met to evaluate current legislature to come up with a “universal model” for life insurers over whether or not to incorporate foreign travel into life insurance underwriting.
Today, many life insurers–including big names like Allstate, MetLife and New York Life Insurance Company–use an applicant’s future travel plans to determine their life insurance premiums. In some cases, insurers will even deny life insurance coverage if the applicant travels to high-risk areas, which are usually determined by the U.S. State Department travel warning list.
The issue of foreign travel and life insurance was put in the spotlight last year after U.S. Representative, Debbie Wasserman Shultz, was denied life insurance after she discussed possible future travel to Israel.
“As an American you can lawfully travel pretty much anywhere in the world,” Wasserman Schultz has been quoted. “You are asking Americans to choose between insuring their lives and legal travel.”
Insurance companies, on the other hand, argue that they should be allowed to increase premiums or deny coverage based on the fact that a person has a higher risk of death in certain areas of the world–treating world travelers much as they would a person with a history of cancer or other pre-existing medical condition.
My opinion falls somewhere in the middle. If my profession required me to spend a great length of time traveling and working in high-risk areas like Somalia, Liberia and Nepal, then I would expect to be turned down by one or two life insurance companies and, ultimately, to pay higher-than-average life insurance premiums.
However, if there’s a possibility that I might travel to Israel or Central Africa during the length of my 30-year term policy, I wouldn’t expect to pay more for life insurance than Helen Hermit, who leaves her house once a month. Call me crazy, but that just seems a little fanatical.
It will be interesting to see what state regulators and legislators come up with on the issue of travel and life insurance. I’ll be sure to post updates here.