Life insurance is a vital investment for every American, but there are a number of important factors that can impact the cost of your life insurance, such as where you live.
When underwriting your life insurance policy, insurance companies will take a number of factors into account when determining how much your premiums will cost.
Your age, gender, occupation, smoker status, alcohol consumption and preexisting medications conditions are a range of expected factors. However, most U.S. consumers forgot about their place of residence.
While it does not have a major influencing role, where you live can also impact the cost of your life insurance. Because mortality rates vary throughout different geographical regions of the United States and throughout the world, insurance companies will factor in an applicant’s present or prospective place of residence to determine insurability.
For example, if you are currently living in Illinois but plan on moving to California in the near future, your application must either be fully completed in Illinois before moving or underwritten as a California resident rather than an Illinois resident.
In addition to U.S. residence, insurance companies will ask applicants if they have recently traveled or resided in a foreign country, particularly in the tropics or places on the State Department’s warning list. They also want to know about any future travel plans.
Differences among countries like climate, living standards, sanitary conditions, medical care, political stability, and terrorist risk can negatively affect someone’s longevity.
Generally speaking, United States companies do not issue policies to applicants whose permanent or temporary residence is in a foreign country, even though that country may have a similar lifestyle to the United States, according to McGill’s Life Insurance. Policies may be issued if the company has an organization and/or representative in said country.
However, there are certain companies that will make an exception regarding foreign travel or residence, which makes shopping around for a policy a vital step.
Keep in mind that a small but growing number of American and Canadian companies do business in foreign countries and use special premium rates to account for the different mortality rates.