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Does Life Insurance Cover you while You Are Travelling?

Last modified: 25 Feb 2013

What is Life Insurance and What Benefits Can I Get?

Life insurance is a broad term used for 5 or more types of personal insurance plans. Some of the popular life insurance plans sold by Australian insurers include, term life covers, income protection insurance plans, total permanent disability insurance plans, trauma insurance plans and personal accident insurance plans. Each of these plans offers a different set of benefits, for instance term life covers offer a compensation payment to your dependants when you pass away; while personal accident insurance plans offer you a compensation payment if you are injured temporarily and cannot work during that time.

Income protection plans protect you against facing financial loss when you cannot work for a few weeks or months due to health problems or injuries. Total and permanent disability insurance plans protect you financially when you are seriously injured and disabled. Trauma insurance plans, most commonly known as critical illness plans protect you financially when you are diagnosed with a terminal illness and need money to settles debts or to keep yourself comfortable. Usually additional benefits can be purchased with most life insurance plans and buyers can also combine 2 or more plans to get maximum financial protection. The total cost of the plan will be determined not only by the type of policy and the cover limit but also by your risk level, your habits, your age and gender.

Do Life Insurance Plans Cover Me While I am Travelling for Business or for Leisure?

If your insurer offers the 24 hour worldwide cover then you will be protected if you are away from your home country temporarily. If you do have this additional benefit, or if your insurer has mentioned in the terms of the contract that you will be protected while travelling then you can expect the insurer to honour the commitment in the case of successful claims. The worldwide cover may either be offered for no additional charge or for a nominal charge.

This will depend largely on the cost of the policy, the terms of the insurer and the terms of the contract. Usually comprehensive plans that offer maximum benefits and cost more than basic plans, offer the worldwide benefit as part of the policy.


Do Life Insurance Plans Cover Me if I Move Abroad for 1 Year or More?

If you are moving away from your home country for a year or more then you may not e covered by your insurance plan especially if you are relocating to a foreign country for a long time. This is because, once you shift to a foreign country your risk factors will change which will in turn change your eligibility criteria for the insurance plan. People who are moving from Australia to developing or under developed countries can be sure, that their insurer will not protect them in these countries unless the insurer mentions otherwise.

If you do have a contract with an insurer but are moving out of Australia for an extended period of time, then you will have to inform your current Australian insurer about this move and you will have to take a fresh policy with a local insurer in the country you have decided to move to. If you have already moved out of Australia without informing your insurer, then you should call up your insurer right away. You may also want to consider talking to an insurance expert in your new location.


Which Additional Benefits Are Offered with term Life Insurance Plans?

Some insurers may offer a free will kit to help you draft your will and reduce the overall legal expenses while making a will. Other insurers may offer a funeral insurance plan for a nominal fee if the buyer is taking a life insurance plan with a higher cover. Some insurers may offer a partial funeral insurance payment when the family of the policy holder files a claim for term life insurance, this will however depend on the rules set by the insurer.

Buyers, who purchase two or more contracts from the same insurer or purchase a term life cover with a higher cover, may be offered a Total Permanent Disability Contract, Trauma Insurance Plan or a Funeral Insurance Plan for a nominal fee. These add on plans may not require any additional underwriting and the buyer may not have to take any additional blood tests to get the contract.


Which Additional Benefits Can I Enjoy with Income Protection Plans?

Income protection plans are offered along with a few free benefits such as the rehabilitation expenses benefit, the accommodation benefit, the transplant surgery benefit and the worldwide cover benefit. Add on benefits that are offered for a nominal fee with income protection plans include, the day one accident cover, the indexation benefit and the guaranteed renewability benefit. Some insurers may offer a range of other free and paid benefits to eligible buyers.

It should be noted that the final number and type of benefits you get will depend on the insurer and the terms of the contract. To check which benefits you are receiving and to check the terms of each benefit, you will have to refer to the Product Disclosure Statement which is a legal document handed over to the buyer by the insurer after the buyer purchases the contract.


How Can I Get Temporary Protection While I am Travelling?

Travel insurance is offered by many insurers in Australia and this type of insurance plan can ensure that if you move to another country temporarily then you are protected at all times by your insurer. it should be noted, that travel insurance can be expensive depending on the benefits you opt for. Travel insurance is ideal as a temporary arrangement while you are settling into your new location and need a few weeks or months to find a good insurer locally. Travel insurance can be purchased online by visiting insurer’s websites or by visiting insurance comparison websites that offer multiple quotes, free comparison services and online advice along with a range of other services.



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