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DI with foreign travel exclusion rider. Is this standard?

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  • DI with foreign travel exclusion rider. Is this standard?

    Long time follower, first time poster.
    just graduated residency and finalizing my DI with principal. I am a foreign graduate and hold a foreign citizenship. The final documents they sent me contain a foreign travel exclusion rider specific to my home country of citizenship, whereby any injury that occurs in that country would be excluded from coverage. I also think that even if injury did not occur there, I cannot collect payment if I am living there (verbiage awkward, reached out to agent to clarify).
    mid this standard? Seems crappy to me.
    thanks!

  • #2
    If you have a foreign travel exclusion on your policy then no benefits are typically paid while outside of the USA. If you don't have an Foreign Travel exclusion most carriers have a out of country limitation of 6 months to 12 months while on claim. The reason for the limit is that part of the pricing that goes into these contracts is based on the rehabilitation capacity of the USA medical care system. The carriers look at different illnesses and injuries to figure out what the typical claim time is for each when using the rehab data from USA patients. That rehab time and thus claim payment from the carrier is all calculated into the anticipated loss ratios for each policy sold which in turn develops the premium you pay for that policy. If you are hurt/sick and outside of the US then the rehab back from that injury or illness most likely will be longer and thus extends the losses of the carriers. That is why they put limits on claims outside of the USA. Even if that extended loss for out of country rehab is not true for 100% of the countries out there that is still a variable which most carriers typically don't want to accept.
    Hope that helps.
    Scott Nelson-Archer, CLU, ChFC
    303-953-0263 Direct / [email protected]

    Comment


    • #3
      Principal considers clients who are in the U.S. on a Work Visa without a foreign travel exclusion. However, in the situation of OFAC countries (such as Iran, Iraq, Syria) a foreign travel exclusion will continue to be required. Foreign travel exclusions are also required within Principal if there are any future travel plans to countries of underwriting concern. The exclusion itself is common within disability insurance carriers. As Scott mentioned, if there is no foreign travel exclusion, claims would be limited to 6-12 months while outside of the country. This exclusion can usually be removed per request, after you receive your Green Card.
      Bob Bhayani, LUTCF
      DrDisabilityQuotes.com
      Email: [email protected]

      Comment


      • #4
        Originally posted by Scott at MD Financial Services View Post
        If you have a foreign travel exclusion on your policy then no benefits are typically paid while outside of the USA. If you don't have an Foreign Travel exclusion most carriers have a out of country limitation of 6 months to 12 months while on claim. The reason for the limit is that part of the pricing that goes into these contracts is based on the rehabilitation capacity of the USA medical care system. The carriers look at different illnesses and injuries to figure out what the typical claim time is for each when using the rehab data from USA patients. That rehab time and thus claim payment from the carrier is all calculated into the anticipated loss ratios for each policy sold which in turn develops the premium you pay for that policy. If you are hurt/sick and outside of the US then the rehab back from that injury or illness most likely will be longer and thus extends the losses of the carriers. That is why they put limits on claims outside of the USA. Even if that extended loss for out of country rehab is not true for 100% of the countries out there that is still a variable which most carriers typically don't want to accept.
        Hope that helps.
        Somewhat of a different spin to the OP's question:

        I am a pulmonary fellow (34yo, no medical history/risk activities/never smoker) looking to purchase disability insurance while in training. I am a green card holder but travel to my home country in Europe twice a year and there is a strong likelihood I will return to Europe within several years after completing my training. At that point, I would maintain green card status by returning to the US for 2-3 months per 12-month period. I was told by a colleague in similar situation that Guardian and Standard would pay benefits in all three of the scenarios below. She ended up purchasing a policy with Guardian for this reason specifically.

        1) If the disability-causing event occurs while traveling in Europe but I return in the US following the event
        2) If the disability-causing event occurs while I live in Europe (but still maintain green card status)
        3) If the disability-causing event occurs while I am still living in the US, but then I decide to move to Europe (while still maintaining green card status)

        I would appreciate any responses from the knowledgeable members of the forum.
        Last edited by phil_gk; 07-31-2021, 12:58 PM.

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