‘Global Citizens’ Scrambling For Life Coverage After 9/11
As the war against terror grows from the Middle East to the Philippines, the need for death benefit coverage is on the rise for U.S. resident aliens and nonresident aliens.
These “global citizens”–individuals who work and reside in multiple countries throughout the year–suddenly find themselves faced with the real threat of danger to their safety and the safety of their families.
However, at the same time the need for life insurance coverage is becoming a priority, reinsurers are becoming more cautious about the risks they will accept.
Already stinging from the liability associated with the World Trade Center attacks, reinsurers are reassessing their risk profiles for insureds on a country-by-country basis. Mergers in the reinsurance market already had the offshore and domestic alien marketplace stepping up underwriting requirements and shifting risk from the reinsurer to the carrier.
Residents of other countries, who used to find U.S. life coverage a commonplace transaction are today finding fewer U.S. carriers willing to step up to the plate and issue contracts to nonresident and resident aliens
All is not entirely hopeless, however, for those agent advisors who have clients from other countries. If those advisors are armed with knowledge of how to approach the constantly changing global marketplace, they can obtain coverage for their clients without undue delays and possible declinations by observing a few “global rules.”
1. Know your client. Find out how many days out of the year your client spends in which countries and the nature of the visits–whether business or personal. A citizen of Afghanistan, for example, may be insurable if he spends all his time outside of the country and has significant interests elsewhere. Likewise, a European who travels to the West Bank, even on occasion, may be a challenge.
2. Get the client to “think like an American.” In most other places throughout the world, the depth of questions U.S. carriers and reinsurers ask of insureds is considered rude and invasive. Too bad. Your client should be prepared to answer direct and thorough inquiries into his business interests, travel habits, income, and health.
Anything less than 100% compliance will almost certainly result in triggering increased underwriting or unwanted delays. This is not the situation where you want to come to the carrier saying, “Please cut me a break. My client is uncomfortable discussing his net worth.”
3. Be prepared for underwritingand lot’s of it. Theres no doubt about it–risk is the new four-letter-word of the 21st century. Underwriters are charged with reducing the risk and will do just that by demanding extensive health and financial information. Often, there are two levels of underwriting involved for resident and nonresident aliens; one from the carrier and the other from the reinsurer.
Prepare your client ahead of time for the real possibility that not only will they be poked, prodded and interviewed, they may be called upon for additional underwriting before an offer is made. A patient attitude is key to enduring the underwriting process.
4. Be armed with several vendors. Many carriers have programs to write resident and nonresident aliens. Most, though, have no hard and fast rules and consider each insured on a case-by-case basis. Spend time interviewing underwriters and marketers from a large number of carriers. Find out the types of “global citizens” that the carrier will consider and try to nail down the specific requirements used to determine if insurability is available.
Much will depend upon a carriers reinsurance arrangements so encourage your home office contacts to check with both internal and external decision-makers.
5. Manage the expectations of your client. As the world changes at a rapid pace, so will all of the rules for providing coverage to resident and nonresident aliens. Residents from or those residing in a country that may be considered insurable one day may become uninsurable the next due to an economic, political or military incident.
Like the game of Chutes and Ladders, just as you are on the verge of success, you and your client might find yourselves sent back to square one by an event outside of your control. If and when this occurs, stay persistent and retool your strategy to adopt to the changing rules that are a daily certainty in the global insurance marketplace.
is the National Sales Manager for Nationwide Financial Services (Bermuda) Ltd. He can be reached via email at firstname.lastname@example.org.
Reproduced from National Underwriter Life & Health/Financial Services Edition, February 18, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.