In 2020, 10.9 million American workers described themselves as digital nomads, up nearly 50% from the year before. Digital nomads use technology to do their jobs remotely, allowing them to travel freely while self-employed or working for a company with location flexibility.

As with any other professional, these individuals should consider life insurance because it:

Helps survivors continue paying monthly bills
Help survivors pay medical or transportation bills resulting from treatment
Helps pay for your body’s repatriation, funeral, and burial expenses

However, due to their inherent lifestyle risks, digital nomads often face unique challenges when shopping for an affordable policy.

The Challenges Digital Nomads Face with Life Insurance

Digital nomads often have trouble purchasing life insurance due to the following circumstances:

Residency and legal jurisdiction: Some plans exclude coverage for extended travel or residence, even for active clients.
Variable income: Freelancers and self-employed individuals may have trouble determining required coverage limits.
Healthcare facility access: Policyholders typically must undergo a health exam within U.S. borders to comply with medical underwriting requirements
Limits: Most plans limit coverage for people caught in the middle of foreign wars, natural disasters, and other uncontrollable phenomena.
Potential high-risk activities: Insurance companies often classify digital nomads who enjoy high-risk activities like mountain climbing, spelunking, and parasailing as uninsurable.

Insurers typically inquire about a new applicant’s international itinerary for the next few years, using these answers to research each destination’s risk level and client insurability. Notably, most companies will deny coverage for people who intend on traveling anywhere that the U.S. State Department has flagged with a travel warning, advisory, or alert.

Tips for Selecting a Life Insurance Policy

When selecting a life insurance policy, digital nomads should consider the following services:

Global coverage: Allows your life insurance to conform to your lifestyle, wherever you end up.
High payouts: Purchasing a death benefit between 10 to 20 times your annual income should cover your burial expenses and provide a small financial cushion for family members.
Longer terms: Opt into an extended contract to guarantee coverage throughout your travels and beyond.
Accident coverage: Many life insurance policies pay out additional funds for death or disability resulting from an accident, typically at little extra cost.
Online management: Automated premium deductions and other electronic services can ensure continued coverage, even for those temporarily without internet service.

At a minimum, seek out a basic plan with 100% repatriation coverage, ensuring your body can return home for the funeral.

The Importance of Being Honest on Your Application

Insurers typically ask for additional information from digital nomads with adventurous hobbies. For example, a rock climber would have to detail their experience, intended activities, and available equipment, helping underwriters accurately determine risk.

While some people may feel pressure to lie or omit information from their application, an insurance investigation would pose significant consequences. A court could convict you of fraud or impose heavy fines for intentionally misleading underwriters or concealing information. Even if you initially get away with it, a posthumous investigation could result in the revocation of your death benefit.

Life Insurance Options for Digital Nomads

If you travel frequently and work remotely, consider the following life insurance plans:

Term life insurance: Term life insurance policies tend to cost less and last for a chosen period, such as 5, 10, 20, or 30 years.
Whole life insurance: Though more expensive, whole life insurance policies last your entire lifetime. Many plans also build cash value that members can withdraw or borrow against without compromising their death benefit.
Accidental death and dismemberment riders: Accidental death and dismemberment riders only pay benefits to the families of individuals who die from an accident, denying coverage for deaths caused by disease and other natural causes.
Group life insurance: Some companies offer affordable group life insurance policies to domestic and international employees.

While shorter-term plans may most adequately suit the temporary needs of digital nomads, they must still pass a physical exam and often face more stringent travel rules. Comparatively, accidental death riders or standalone policies may better suit adventure seekers, though they have a much lower likelihood of paying a death benefit.

Regularly Review Your Needs

While digital nomads can partake in foreign experiences while working remotely, they must always plan these trips carefully. The same meticulous approach should apply when shopping for life insurance. Regularly review your situation and ask yourself the following questions:

Is your death benefit large enough to support your family after you die?
Does your policy’s term cover the length of your travels?
Where do you intend to travel over the next two years?
How will risky hobbies affect your premium?

Most importantly, compare plans to find the best available policy for your budget, personal lifestyle, and family needs. Doing so ensures you can enjoy your travels knowing your loved ones are taken care of, regardless of the unpredictable nature of your lifestyle.

Digital Nomads and Life Insurance: What You Need to Know

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