Does Life Insurance Pay Out if You Die While Abroad?

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Life insurance can financially protect your loved ones when you pass away. But what if you—the policyholder—die while you're out of the country? In most instances, life insurance will provide a payout if the policyholder dies overseas. However, that might not always be the case. For example, your destination might matter when your life insurance company is deciding whether to pay out. After all, climbing Mount Everest will be treated very differently than a business meeting in Canada.

When Does Life Insurance Pay Out When You Die Overseas?

A payout is often, but not always, approved for beneficiaries if the policyholder dies while out of the country. Some insurers might require that a policy be in effect for at least two years in order to authorize a payout.

Before it approves a payout, a life insurance company asks the beneficiaries to file what's known as a foreign death claim and to get proof of the policyholder's death. Typically, a death certificate is issued after someone dies in the U.S. But other countries might not report deaths in the same way, which could complicate obtaining proof of the policyholder's death.

To prevent fraud, life insurance companies want beneficiaries to obtain proof of death. If you're a beneficiary running into trouble securing that proof, such as medical records or autopsy reports, reach out to the U.S. embassy in the country where the policyholder died. You also might hire an attorney who specializes in foreign death claims.

What Situations Might Prevent a Life Insurance Payout for an Overseas Death?

Just like any other legal agreement, make sure to read the fine print on your life insurance policy. An insurance company might reject a claim for a foreign death if:

  • The beneficiaries can't provide sufficient proof of death
  • The policyholder's cause of death is suspicious
  • The policyholder died by suicide
  • The policyholder died in a country that's considered unsafe for travelers
  • The policyholder didn't disclose before a trip that they were going to engage in risky activities, such as rock climbing or skydiving
  • The policyholder died as a result of an act of war that's excluded by the policy

A life insurer also might deny a claim if a U.S. policyholder was overseas for an extended period of time. Generally, someone is declared a non-U.S. resident if they've been out of the country for six months or more.

The policyholder should notify their life insurance company if they plan to be out of the country for a long period or if they're going to be making frequent international trips. Life insurance companies often make lengthy investigations before making a payout, so being upfront about your plans could prevent an insurance company from rejecting a claim.

Applying for Life Insurance if You're an International Traveler

When applying for life insurance, most companies ask for information about your medical history and lifestyle, including whether you have any high-risk hobbies or if you're a frequent traveler. Again, be honest about regular foreign travel and any risky activities (like rock climbing or skydiving) you might enjoy during international trips. This information may boost your premiums, but it also could prevent the life insurance company from blocking a policy payout.

A life insurer may scrutinize your application more closely if you plan frequent trips to countries that are politically unstable, have poor health care, have high mortality rates or are otherwise unsafe. It's worth noting that frequent travel within the U.S. and Canada probably won't be an issue during the application process.

Furthermore, a life insurance company might also review your application more carefully if you're seeking coverage a month or two before international travel. The insurer might even wait to approve your application until after you've finished your trip. But some states prohibit life insurers from considering past or future travel as part of the approval process.

If you're a globetrotter, make sure any life insurance policy you buy will cover an overseas death. Keep in mind that if you're heading to a particularly dangerous country, you might need to purchase a separate high-risk policy that just covers that trip.

The Bottom Line

Most life insurance policies will approve a payout if the policyholder dies overseas, but there are actions you can take to make sure, such as being upfront about your travel habits.

In addition to your medical history and lifestyle, when you apply for life insurance a company might also review your credit. Having poor credit doesn't mean you'll be denied a policy, but it could have an impact on your premium. You can monitor your credit score with Experian to see how your credit may affect your life insurance costs.