I’m not a frequent flyer, but I rarely buy travel insurance for domestic travel for the same reason I don’t buy extended warranties — the chances that I’ll use it are small.
On international trips and even long trips in the U.S., however, I think it’s a worthwhile expense that can help with many things from lost luggage to rescheduling a trip because of a family emergency, especially for frequent flyers.
The same is true for frequent flyers outside of the U.S. when it comes to life insurance. Again, I wouldn’t go out and buy a life insurance policy just because I was flying across the country. But a trip outside of the U.S., especially to a country at war or a hotspot for terrorists? Then a life insurance policy would be a wise purchase.
One of the great things about life insurance is that once your application is approved and you have the insurance, the policy will pay out as long as the premium payments are made on time and you haven’t lied to your insurer. Being a frequent flyer and traveler can work to your advantage. It’s not like an auto insurance policy that is re-evaluated every year to check that you’re still driving so many miles to work each week and that you haven’t caused any crashes lately.
Once the life insurance policy takes effect, it’s yours. You can travel the world to dangerous countries as a frequent flyer, or take up dangerous habits, and the policy will pay out upon your death.
Will it pay out if I die outside the U.S.?
This is one of the most common questions about life insurance for frequent flyers, says Christopher Huntley, co-owner of JRC Insurance Group. Yes, it will, assuming you answered the initial travel questions on the application truthfully.
The claims process would be similar to if you were to die in the U.S. Your beneficiary would fill out a death claim form. The only difference is they may have to get a death certificate for you from the country you were visiting.
Will it pay if I change plans and travel?
Even if you answer “no” to the travel questions on the life insurance application because you don’t currently have plans to travel or move outside of the country, but then you later travel or move outside of the U.S. and die there, the policy will still pay out, Huntley says. Being a frequent flyer or not doesn’t matter.
The insurance carrier would have to prove you were lying on your original application to refuse the payout, he says.
For example, if you knew you were moving to Nigeria in three months, took out a U.S. policy, and lied on the application about your travel plans, saying you had no intention of traveling outside the U.S., and then died in Nigeria, it would be a “slam dunk” case of fraud, Huntley says. Your claim would likely be denied.
Frequent flyers to big cities
Generally speaking, some companies will decline you if you visit hazardous countries such as in Africa or the Middle East as a frequent flyer. It depends on what country you visit and for how long.
In some lesser developed countries, the carriers are OK with it as long as you stay in the bigger cities, Huntley says. If you’re traveling outside the U.S. they always ask you to fill out a travel questionnaire so they can get a feel for why you’re traveling, what type of accommodations you’ll be staying in, and other safety factors, he says.
Someone traveling to China for work for two weeks and staying in a hotel in Beijing is more likely to be approved than someone traveling to China for two weeks doing missionary work in rural areas.
A frequent flyer questionnaire loophole
One loophole is how the insurance company phrases its travel question on the application, whether for a frequent flyer or an overseas vacation. Genworth, for example, has this travel question:
“In the next two years, to you intend to travel or reside outside of the U.S. for more than four consecutive weeks other than for vacation?”
The grey area, Huntley says, is that you could simply answer “no” if you’re going to Iraq next month for three weeks. Or if you were going to take a six-week tour of the Holy Land in Israel later this year, you could still answer “no” because it’s a vacation, and the question asks if you’re traveling for reasons other than a vacation.
You wouldn’t be lying, Huntley says, nor would you be committing fraud. The insurer also can’t penalize you for the trip as a frequent flyer since they wouldn’t know about it.
“The point is you have to be careful to disclose your travels to agents, be sure to speak to a knowledgeable agent who can take you to the carrier with the most favorable guidelines and application question for the traveler,” Huntley says.
I’m not someone who looks for legal loopholes in documents, but truthfully answering an insurer’s questionnaire seems to be the best way to get the coverage you need while traveling as a frequent flyer outside of the U.S.
