Digital nomads use technology to earn a living while traveling and conducting their life in a nomadic manner. With more companies transitioning into a remote environment and with the rollout of COVID vaccines, some people may be considering traveling while they work.
Digital nomads live an on-the-go lifestyle that fulfills their sense of wonder. However, there are certain drawbacks to living this lifestyle. For digital nomads, the absence of a fixed location or address might make things such as finding insurance more challenging.
While purchasing a million-dollar life insurance policy may be difficult as a nomad, it’s not entirely impossible for these individuals to get a life insurance policy with a substantial death benefit.
What type of insurance coverage do digital nomads need?
If you work remotely for a firm that provides benefits, you may be protected by group insurance provided by your employer. In some circumstances, your employer may pay you for your premiums up to a certain amount.
When you work or travel overseas, especially for extended periods of time, insuring yourself becomes a little more complicated. Self-employed digital nomads are responsible for putting together their own benefits package, which may include life insurance, health insurance, and travel insurance.
In many respects, your insurability influences whether you are accepted as a client by a life insurance company. Since digital nomads are exposed to a variety of places and conditions, they are susceptible to a range of diseases and risk factors that a stationary person would not be.
Insuring your trips with travel insurance and routinely visiting healthcare professionals under a health insurance plan lowers your risk level in the eyes of life insurance providers. Visiting a doctor regularly is especially important since it is a habit that will improve your life and ensure your continued health.
Life Insurance Is Crucial for Digital Nomads
It’s just as essential to plan for your life as it is for your travels as a digital nomad. No matter what stage of life — or where you live — life insurance should be a component of that preparation.
The death benefit from a digital nomad policy might be used for final costs, paying off outstanding debt, leaving money for children, or anything else. Plus, life insurance can help the family members of digital nomads return their bodies home so they can say their last goodbyes.
Are you ineligible for life insurance coverage if you travel internationally?
Unlike auto or home insurance, your ZIP code has no bearing on your life insurance prices. Instead, throughout the underwriting process, you’ll most likely be asked about your travel patterns. Unless you go to nations that are considered riskier, overseas travel will usually not affect your rate.
It’s better to buy insurance as a digital nomad while you’re still in the U.S. or at home. To avoid any underwriting difficulties, don’t try to get insurance while you’re out of the country, and be honest about your present living arrangement and travel patterns.
Being dishonest on your application can disqualify you from coverage or slow the underwriting process down significantly.
Once a digital nomad has life insurance, there isn’t much that insurers can do to prevent them from leaving the nation and traveling as much as they see fit.
How To Apply for Life Insurance as a Digital Nomad
Generally, you apply for life insurance the same way that anyone else would. The only challenge would be documenting a permanent address.
It’s difficult, but not impossible, for digital nomads to get life insurance without a fixed location and address. They can either use a relative’s address or keep a home base in the U.S.
Outside of passing a medical exam, nomads with a house or permanent status in the U.S. should have no trouble getting life insurance. If a medical examination is required, nomads can simply return home to take it.
Some insurers will let digital nomads use a relative’s address in an application, while others will not. Before applying, contact the company and ask them. If an insurance provider allows you to use a relative’s address, the premium may go up if the underwriter decides you migrate too frequently or too much in a particular period.
Once you have decided where you will document your permanent address as on your application, you should redirect any mail to a postal address.
Postal office (PO) box addresses stay the same even though you are switching addresses throughout the year. As a digital nomad, having a PO box can make it easier for you to keep track of any important notices mailed out to you.
Outside of providing a residential address, the application process is simple unless you need to take a medical exam.
Medical Exam for Life Insurance
A medical exam is required for most life insurance plans, including term life insurance. This test aids the insurance provider in determining your risk and determining your price.
It takes around 20 to 30 minutes to complete a life insurance medical exam. It involves measurements such as height, weight, and blood pressure, as well as blood or urine samples and a medical history questionnaire.
Your health measurements play a vital role in the rates you receive. Healthier lab results mean cheaper life insurance rates will be, but you should avoid falsifying any component of the life insurance application.
Alternatively, there are life insurance options that don’t require you to complete a medical exam.
A medical exam is not required for simplified issue life insurance plans and no-exam term life insurance policies. However, you may be asked to complete a brief health questionnaire as part of the application process.
Unfortunately, coverage is usually more expensive than a policy that needs a medical exam, and the death benefit payout is usually lower than what you can get with a policy that requires a medical exam.
Be Honest on Your Life Insurance Application
There isn’t a single life insurance policy that doesn’t have a provision for omissions, errors, or misstatements. If those misstatements are relevant to your death, your policy might be voided, even if you paid all of your premiums on time.
To avoid a long, drawn-out dispute with your insurance provider over claimed misrepresentation, disclose all medical problems, where you intend to live while overseas, and what you plan to accomplish while there.
Certain medical problems, travel places, and hobbies make an insurer think you’re a higher risk. While your premium may rise because of this, you will still be insured and you do not risk paying your premiums just for your beneficiary to miss out on their pay-out.
Also, state how long you intend to be away. Some plans can become inactive after six to eight months overseas, and your beneficiaries’ claims will not be paid if you die during that time.
Term Life vs. Whole Life Insurance for a Digital Nomad
Every day you decide on what to save or splurge on so you can continue your life as a digital nomad. The same applies to having to decide on whether term life or whole life insurance is ideal for your specific lifestyle.
Term life insurance covers you for a set period of time. Ten years, 15 years, 20 years, 25 years, 30 years, and 35 years are the most popular term lengths. If you die unexpectedly, your family’s financial future and your after-death expenditures are safe as long as your premiums are paid on time.
Term life insurance plans can also be laddered, which means you can buy them for varying terms and amounts depending on your changing requirements.
Whole life insurance will cover you for the rest of your life while also building up a cash value that you may use or borrow against.
Whole life insurance, on the other hand, is highly expensive and may provide more coverage than you want, especially if your children or other dependents grow up and become self-sufficient before you pass away.
The cost of living in the locations where you choose to settle and visit, your debt burden, the people who depend on your income, and any financial ambitions will all influence whether you pick a whole life or term life insurance policy.
A digital nomad’s lifestyle is independent and unattached to any one area, but it must not be left unguarded. Search for insurance that will protect you regardless of where your travels lead you. After you’ve compared and found the best rates, buy a life insurance policy that covers your nomadic lifestyle.
Imani Francies writes and researches for the life insurance comparison site, LifeInsurancePost.com. She enjoys helping people find the best insurance policies that meet their specific needs.
Published on Holr Magazine