Foreign Travel Impact on Life Insurance

A few years ago, as apart of a client’s financial planning we determined that she had a need for life insurance. She wanted to ensure her mortgage and student debt was covered, in case of pre-mature death. She was healthy and active and had no major family history of illness. It did not appear there would be any issues as it related to underwriting.

Unfortunately the stumbling block during underwriting turned out to be the client’s foreign travel history. She worked for a non-profit and her job required her to visit regions impacted by natural disasters and conflict. This led us to seek out life insurance options from providers where her travel history would not impact qualification and we were able to successfully place a policy.

With the summer travel season upon us, foreign travel can have significant impact on a new life insurance policy application. Countries or regions, especially those on Canada’s foreign travel advisory list can cause applications to be postponed or outright denied.

Depending on the insurer, questions regarding foreign travel can be limited to a period of time prior to application and/or future travel plans. It can require an extensive declaration of all areas already travelled or intended or a very basic and simple question with regards to travel.

As such it is prudent to work with an expert to determine the optimal solution for your particular circumstances. Below are some examples of Foreign travel questions that form part of life insurance applications from some of Canada’s largest life insurance providers:

BMO Insurance:

a) Have you traveled, resided, or worked outside North America in the past 12 months or have any plans to do so in the next 12 months? (If Yes, provide details in Comment Sections including length of time outside of North America, dates, and purpose of trips)
b) Has anyone proposed for coverage intend to reside or travel outside of Canada for more than four consecutive weeks?

Canada Life Insurance:

a) Within the past 12 months have you travelled, lived or worked outside of Canada and the United States? If yes, provide details including city or region, country, reason, frequency and duration.
b) Within the next 12 months do you intend to travel, live or work outside Canada and the United States?

Canada Protection Plan (CPP) asks:

Do you plan to travel outside North America, the Caribbean (excluding Haiti), the United Kingdom or the European Union countries for more than 12 consecutive weeks in the next 12 months?

Desjardins Insurance:

a) traveled or stayed outside of Canada or the United Staes in the past 12 months?
b) Do you intend to do so in the next 12 months?

Empire Life:

– Other than travel of 180 days or less per year within North America, European Union countries, the UK or the Caribbean, do you have plans to travel or reside outside of Canada in the next 12 months?

Foresters Financial:

a) Have you traveled outside of Canada or the United Staes in the last 12 months?
b) Do you plan to travel outside of Canada or the United States in the next 12 months?
c) Do you plan to change your country of residency in the next 24 months?

Industrial Alliance:

– In the next two years, do you plan to travel or reside outside of Canada or the United States?

Ivari:

– With the exception of travelling 6 months or less per year within North America, the Caribbean or European
Union countries, do you have any plans to travel or reside outside of Canada in the next 12 months?
If “yes”, provide details: countries, cities, purpose of travel, length of stay and expected number of trips per year

Manulife Insurance:

a) Do you expect to change your country of residence?
b) Do you expect to travel outside Canada and the United States within the next 12 months?
– If yes (to question above), will you be traveling to a Caribbean or Mexican resort for less than four weeks, or traveling by cruise ship?
– Do you have any other travel plans?

RBC Insurance:

a) Within the last 2 years, traveled outside of Canada or the United Staes of America or have plans to do so in the future? If yes, please complete the Foreign Travel Questionnaire.

SSQ Insurance:

a) In the last two (2) years, have you travelled or lived outside of Canada or the United States? If yes, indicate where, when and for how long.
b) In the next two (2) years, do you intend to travel or live outside of Canada or the United States? If yes, complete Foreign Residence and Travel questionnaire.

Sun Life Insurance:

a) In the last 12 months have you travelled or resided outside of Canada? (Exclude travel or residence of less than 6 months in the United States)
b) In the next 12 months do you intend to travel or reside outside of Canada? (Exclude travel or residence of less than 6 months in the United States)

Life insurance companies can change wording in their applications at anytime. A few years ago for example, Foresters Financial asked: “Are you planning to travel, work or live outside of North America for more than 1 month? (If YES, give details on frequency, location and length of stay)” compared to the 3 questions they now ask as seen above.

In most cases, applicants that intend to travel outside Canada, the United States are asked to complete a “Foreign Travel Questionnaire”. Depending on the regions or countries visited this can have no impact on the approval of the application, create an exclusion (ie if insurered dies in specific country) or in rare cases deny or postpone the policy.

Lucikly there are many options and working with an expert can help you identify best solution to fit your specific circumstances.

We would be happy to provide further analysis for your family’s specific circumstances. Contact Protect Your Wealth today to learn more! We proudly service clients in Ancaster, Burlington, Dundas, Hamilton, Oakville, Waterdown and the surrounding areas.