International Benefits in the 21st Century

International Benefits GlobeIn today’s business world, long gone are the days of regionalism and local sourcing, as companies of any size across many fields conduct business on a global scale.  Almost every inch of the map has been filled-in and connected by electronic communication, providing immediate transfer of information, spanning vast distances instantly.  Contemporary technologies and conveniences like e-mail and web-based conferencing have allowed for American-domiciled corporations to transact business anywhere in the world at any time of day.

Highly-educated specialist hires have become commonplace among big, medium and small business, no matter nationality or location of residence.  A successful firm’s reach is no longer limited to four walls in New York or Chicago, but to every nation on earth.  U.S. companies are now multinational, employing numerous staff traveling frequently or even residing outside of the United States.

In response to the rapid development of global economic expansion, the insurance industry has attempted to keep-up since the end of the twentieth century.  Although sometimes slow to adapt and modernize, markets contributing to the personal accident and employee benefits sectors have developed successful marketing and underwriting platforms for American firms with international interests.

As traditional domestic life and health carriers tend to lack a substantial appetite for international risk, many solutions for multinational employers lay outside “usual” insurance channels.  The most relevant player in the international benefits market is centuries-old giant Lloyd’s of London, accompanied by other major insurers and reinsurers in the outlying London and European markets.  Several large domestic carriers also partake regularly in the group health arena, but the Lloyd’s market remains the go-to for niche international solutions, attempting to mirror the individual and group benefits of domestic counterparts while simultaneously adapting to the daily-changing political and economic climates of the rest of the world.

Most U.S. employers contractually guarantee benefits regardless of employee occupations, compensations, international travel schedules or overseas residences.  Unbeknownst to many of those employers, life insurance, disability insurance, medical insurance, accident insurance and other ancillary international benefits are difficult, if not impossible to acquire through the domestic market.  Through international channels, however, group and individual benefits are readily available for American employers with risks based outside the United States.

International life insurance offerings are usually limited to term products for individuals and groups of U.S. citizens and/or employees of U.S.-domiciled companies living and working outside the United States and outside their home countries.  Policies are available on guaranteed-issue, simplified-issue and fully-underwritten chassis, but unlike the U.S. life market, policy wordings often times don’t include contestability clauses or any limitations regarding international travel or residence.  The downside is that international policies usually have no convertibility and are limited to 10 year maximum terms with no permanent or variable life options.  But in many regards, U.S. life carriers are far behind foreign life companies who are in the business of providing true global benefits.

Disability insurance for international risks is also limited to term products, but the benefit schedules can be very flexible with long monthly benefit periods and optional lump sum payouts.  Individually-underwritten policies as well as multi-life guaranteed-issue coverage are commonplace in the international benefits sector.  But unlike domestic insurance, international DI carriers don’t require claimants to return to the U.S. to receive benefits, and underwriting standards are far more lenient than those of domestic insurers. 

International major medical insurance is usually guaranteed-issue and available on a variety of chassis depending on the need and length of the policy required.  From tourist and travel policies to longer-term foreign residence healthcare, international medical insurance offers reimbursement benefits for accident and sickness as well as specialty riders for emergency evacuation, repatriation of remains, war and terrorism as well as hazardous sports/activities coverage.  Some carriers emphasize medical benefits while other plans are heavy on travel benefits.

Accident insurance including accidental death/dismemberment (AD&D) and business travel accident (BTA) has become quite common for those working overseas, especially in war zones and other political hot spots when fully-underwritten life insurance isn’t a plausible short-term solution due to time sensitive underwriting logistics and the severity of risk location.

Other major concerns for those working and living abroad are kidnappings for ransom which have become a huge source of revenue for organized crime syndicates and terror groups in developing and third-world nations.  Policies available in the market provide ransom reimbursement as well the emergency assistance of experienced crisis response teams that employ negotiation specialists who are experts in gaining the safe return of a kidnapped employee.  Workers’ comp programs such as Defense Base Act (DBA) coverage are also popular as the insurance has become requisite of most civilians working overseas on government contracts.  

Requests for most international insurances come from the corporate world including human resource managers requiring benefits for employees working overseas.  But the need for international coverage is also common among small business owners, tourists, U.S. expats, government contractors as well as missionary and foreign-aid organizations.

As international business continues to expand and develop for American companies, the need for basic and essential risk indemnification evolves with the socioeconomic conditions found throughout the world.  The insurances available reflect those hazards and concerns that change on a daily basis.  The realm of international insurance has become as flexible and reactive as the world in which it serves.