Expatriate Group Life Insurance and General Issues Regarding Expatriate Life Insurance.
When expatriate group insurance plans are first discussed, 80% of the focus is on the expatriate group medical plan, and life and disability insurance receives little attention if the group is composed entirely of U.S. expatriates because it is believed that the U.S. life insurance and disability carrier can cover U.S. expatriates on permanent assignment. This may not be true at all and never "assume."
U.S. Expatriate Life Insurance
For many years, U.S. expatriate groups have been "left in the U.S. group life insurance plan" with the belief there are no problems whatsoever with U.S. based life and LTD insurers extending coverage to U.S. expatriates.
The facts are, there are many reasons why U.S. based life and LTD carriers cannot provide insurance benefits to those that are on expat assignments.
What are the problems?
First, the U.S. life insurance or disability insurance carrier is not filed to provide expatriate life insurance. This means, their insurance policy that they have filed with the department of insurance in the various states almost never has a territory of "global" or outside of North America.
A carrier cannot file insurance products with the Department of insurance in Delaware and then start covering employees and individuals thousands of miles away in Japan!
Does the U.S. carrier even know they are providing expatriate life insurance?
We speak to benefit managers all the time that tell us that everything is fine, and the U.S. life carrier is providing the expatriate benefits. However, upon investigation we find that the carrier may not even be aware they are covering expatriates for life insurance. Perhaps the employer has 4,000 employees can includes 12 expatriates in a self reported eligibility run where the use the home office address for any expatriate? Who at the carrier would possibly catch this.
Even when the carrier is aware, in many cases little or nothing is done. The account manager does not report it. If the underwriter is aware, they are unsure what to do because they have no policy or directives on U.S. expatriates. Even if they do, do they want to risk upsetting a large client by kicking off 12 people!
HOWEVER, if three expatriates die overseas in a helicopter accident and the carrier is looking at a $1,200,000 claim, things may get more complicated and the claim could be denied. Most employers have no written acknowledgement that the carrier has agreed to provide expatriate life insurance.
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