Watch How You Answer Travel Questions on Life Insurance Applications
Have you ever regretted something that you have done in the past? Maybe you are contemplating doing something and in that moment and you realize there might be a negative effect as a result. Now, did you ever think that you could be penalized for something you think you may do at some point in time?
Yes, it’s true. Some life insurance companies actually decline your application for life insurance based on the fact that you answered their question about future potential travel in a way they deem to be a risk. Insurance companies have been doing risk assessment for years this is just one aspect of assessing the risk you pose.
The International Travel Question
Depending on whom you are and what you do for work this question, asked on your life insurance application, might prove to be the reason you are denied coverage. In the case of work, perhaps you are in local, state or even federal government. If so, you may have occasion to travel or even have the potential to “someday” travel to different destinations around the world.
Before you answer this question, be sure you review the current U.S. State Department Travel Warning List, an extensive list noting all the countries that the U.S. deems not safe for travel for a U.S. citizen. As U.S. citizens, we can travel to nearly anywhere in world we see fit.
What Determines a State Department Warning?
Travel warnings are issued for a variety of reasons. They are designed to inform U.S. citizens of what countries are considered a risk to their safety if entered. Not only is the State Department advising citizens of risk factor, in many cases they are actually stating to avoid the country all together.
These warnings go into effect when a country becomes dangerous or unstable due to a few factors such as the U.S. government’s ability to assist an American effectively due to an embassy or consulate closure or inadequate staffing levels. In other cases, long-term unrest that escalates will prompt a warning to be issued.
Many of the countries listed are those we have become familiar with simply by watching the evening news or reading the opening page of yahoo for example. Parts of the Middle East and South America continually make the list. The popular vacation destination of Mexico was issued a warning in April. In 2011 alone, there have been to date approximately 30 warnings issued. You can find a complete warning list at the following link, U.S. State Department’s Current Travel Warnings list.
What Changes Have Been Made
In 2007 a bill was introduced, The Life Insurance Fairness for Travelers Act of 2007. “A bill to provide for mandatory availability of life insurance that does not preclude future lawful travel and for other purposes “was read twice in July 2007 and referred to the Committee on Banking, Housing, and Urban Affairs.
A session of Congress lasts two years. The bill was first introduced at the end of one session and picked back up during the next. At the close of each session of Congress, any bills or propositions that have not passed are cleared from the books. In many cases, parts of bills, text, resolutions or propositions are incorporated into another. At this time it appears the original bill, as it was known, no longer exists.
During 2006, before the introduction of the bill, as many as five states (a few more pending) had enacted their own state level regulations whereby the use of foreign travel plans would be curtailed in underwriting. The basic premise, although varied by state, would not allow an insurance company to use the only fact of foreign travel as a means of denial. One state, Florida, has a law specifically prohibiting the use of foreign travel as a means for denial. Florida doesn’t allow any foreign travel related questions be asked of its applicants.
Know Before You Go
Some insurance companies are sticking to their guns and making strong cases for denial due to foreign travel. Companies are basing their underwriting decisions solely on the specific countries statistics on disease, crime and general health status. The debate can go either way. In some cases, insurance companies are trying to keep you safe, as well their policy payouts down by prohibiting certain foreign travel. Others however, will argue that as Americans we have the right of travel and should expect to be insured based on our health not on a perceived scenario.
In either case, the following link will direct you to an interesting website about specific country statistics, The CIA World Fact Book. Regardless of which side of the fence you are on, it’s worth checking out, especially if you are planning on traveling.