Traveling or living abroad are factors life insurance companies take into consideration when assessing an applicant’s eligibility or premiums. While most policies cover foreign deaths, there are specific circumstances when they might not. Since the COVID-19 pandemic still affects travel and quarantine orders worldwide, insureds could get stuck outside the US for an extended period. That is why it is essential for them and their beneficiaries to be aware of these exceptions.

In this article, our life insurance lawyers explain what happens to life insurance if the insured dies abroad, reasons why insurers will not pay for foreign deaths, and how to handle a denied claim if this situation occurs. 

If you have issues with a claim denied because the insured passed away while traveling abroad, call us at (888) 510-2212 for a free case evaluation.

Does Life Insurance Cover Foreign Death Claims?

A “foreign death claim” refers to the claim beneficiaries file when the insured died abroad. 

Unless exclusions apply, most life insurance policies cover foreign death claims if it has been in place for at least two years. If the insured dies within the first two years of the policy effective date, also known as the contestability period, insurance companies have the right to investigate how the death occurred and review the application form. They will make the payout if they receive substantial proof of death and do not find any misleading information on the form. Otherwise, they will deny the claim.

Payment for a foreign death claim could also be delayed. Insurers continuously ask beneficiaries to provide additional records as a delaying tactic. 

At the same time, it is not uncommon for life insurance companies to feel suspicious of people faking their deaths if the death certificate or proof of death looks different than their equivalent in the US. To protect themselves against insurance fraud, they will launch an investigation, delaying the benefit payment. Whether the insurer will pay a delayed claim or not will depend on the final result of the investigation.

Travel Insurance and Overseas Death Claims

Some travel insurance policies provide life insurance coverage if the policyowner dies abroad. There are three types of life insurance policies insureds can buy:

• Common Carrier. This policy pays out the benefit if the insured accidentally loses life or limb while traveling on public or ticketed transportation such as trains, buses, planes, or cruise ships.
• Accidental Death. This policy pays out the benefit if the insured is involved in an accident while traveling or abroad and loses life or limb.
• Flight and Airline Accident. This policy provides coverage only if the policyholder loses life or limb due to an accident during a regularly scheduled flight. 

Reasons Foreign Death Life Insurance Claims Are Denied

There are many reasons why life insurance will not pay out in general. Below are the most common reasons companies could use to contest claims that involve overseas deaths:

Life Insurance Policy Lapse

Regardless if the insured passed away in the USA or abroad, the first thing life insurance companies will look at when they receive a claim for death benefits is whether the policy was active at the time of death. If the policyowner fails to pay premiums, the policy will lapse. This means that there is no coverage and the insurer has no obligation to pay the proceeds. You can learn more about how to handle such situations from our article about life insurance policy lapse.

Material Misrepresentation

When deciding the risk level and the premiums, life insurance companies consider the applicant’s international travel history and habits. This includes countries they have visited or plan to visit, how often they travel abroad, what they do there and how long they intend to stay. The foreign death claim might be denied due to material misrepresentation if the applicant was not truthful while answering these questions from the life insurance application form. To avoid this, it is recommended that policyholders inform the insurer whenever they want to travel.

Failure to Disclose Engaging in Risky Activities

Candidate risk assessment also considers the type of activities the insured engages in regularly. The beneficiary’s claim could be denied if the applicant failed to disclose dangerous or extreme hobbies or activities like skydiving or base jumping. If the insured happens to die while doing them abroad, the insurance company can claim material misrepresentation and refuse payment.

Insufficient Proof of Foreign Death

This refers to the difficulty life insurance companies face when investigating overseas deaths. It largely depends on how developed the country the insured visited. Poor infrastructure, limited access to technology, terrorism risk, and how susceptible the country is to natural disasters influence how soon – and if ever – insurers can gather the appropriate documentation. This is especially true for remote and underdeveloped countries. The records must meet the policy’s requirements for beneficiaries to collect an overseas death claim payout.

Suspicious Death

Suspicious death means that the cause of death is inconclusive. Therefore the insurance agency cannot determine claim eligibility. This does not mean that the claim is denied initially but that it might be delayed depending on how long it takes to piece together the circumstances in which the death occurred. 

Suicide

Life insurance policies include a suicide exclusion that allows insurers to deny paying the claim if the policyowner committed suicide during the first two years since acquiring the policy. This means that beneficiaries are not entitled to the life insurance death benefit, regardless of whether the death occurred in the US or abroad. Our life insurance attorneys discuss how to deal with such cases in our article about the life insurance suicide clause. 

Act of War

Act of war is another typical life insurance exclusion. If death is considered the result of an act of war in the area the insured was traveling, the insurer will likely deny the foreign death claim. This includes circumstances such as terrorism, revolution, or insurrection.

Do Life Insurance Policies Pay Out If the Insured Dies of COVID-19 While Traveling Abroad?

During a pandemic, traveling abroad is highly risky. The country of destination will play a role in the claim evaluation, especially if the insured was aware of the restrictions. 

Usually, beneficiaries will have access to the life insurance payout if the insured contracted and died of COVID-19 overseas. However, there are a few exceptions:

• If the insured had an accidental policy
• If the insured had a critical illness policy
• If the insured made a material misrepresentation on the application form
• If there was no coverage at the time of death due to lapse

You can read more about these in our blog post about whether life insurance covers coronavirus deaths. 

What to Do if the Insured Dies in Another Country?

If the insured passes away abroad, you should take a few steps to make sure you can file a claim in time because there is a specific time frame for this. Read more about this in our article about how long you have to claim life insurance.

1. Notify the US Embassy

If the policyholder was a US citizen, the first thing you should do is report the death to the US Embassy in the country where the insured was traveling. They can offer advice on the steps to take and make the necessary arrangements. 

2. Obtain the Death Certificate

As mentioned previously, obtaining the death certificate and other support documentation might prove difficult. It is best to ask the US Embassy for assistance as they know how to navigate the local government regulations.

3. File the Claim

To improve your chances of receiving the death benefit as soon as possible, you must know what documents you need to provide and gather all of them at once and within the deadline provided in the life insurance policy. A life insurance lawyer can help put together the documentation and file the claim for you. 

Our attorneys explain the steps in greater detail in our blog posts about how to file a life insurance claim.

4. Make the Necessary Arrangements

You need to decide if the deceased’s body is buried abroad, sent back to the US, or cremated and sent to the US. However, if you are considering cremation, it is best to talk to the insurance company first and learn how they intend to handle the claim. If the insured dies during the first two years after the policy became active, they are entitled to request an autopsy as part of the contestability review.

What to Do if the Insurance Company Denies Your Foreign Death Claim for Benefits?

If you or someone you know has issues with a denied or delayed life insurance claim due to overseas death, you should immediately seek legal assistance to learn your options. Our life insurance attorneys have years of experience handling such cases for all the reasons listed above. They can recognize when the insurer wrongfully refuses payment and create a comprehensive legal brief to expedite or recover the proceeds. Further, if you need help during the claim process, they can provide support at every step, from explaining your life insurance beneficiary rights to submitting a claim, filing an appeal, or suing the insurer. 

At our law firm, we offer competitive contingent fees. That means that we do not get paid unless we win your case. Only then will we discuss a fee structure that is comfortable for you.

Read about how we recovered $500,000 for a claim delayed due to foreign death.

Call us at (888) 510-2212 for a free consultation with one of our life insurance lawyers.