Exclusions May Apply


Marylanders planning to travel to Israel while maintaining their life insurance may face a bumpy road ahead. As one local insurance agent found out recently, the state’s 2005 law protecting consumers from discrimination based on past travel does not protect those who wish to travel in the future.

“It’s really discriminatory,” said Kenneth Birnbaum, a Baltimore insurance agent whose client was told he would not be covered for anything happening to him while visiting certain parts of Israel. In filling out the application required for coverage by Transamerica, Birnbaum’s client revealed that he planned on traveling to Israel soon — his son currently studies in Jerusalem. When Birnbaum heard back from the insurance company, it was to inform him that his client’s travel plans would result in a lapse of coverage.

The situation, Birnbaum said, was disconcerting. If the applicant had left the future plans off the form and then something had happened while he was overseas, his dependents could have faced a penalty, but disclosing the information resulted in the company refusing to cover him while he was in Israel.

This practice is not uncommon. Insurance providers take all kinds of factors into account when making decisions about coverage. In many states, insurance companies refer to the State Department’s travel advisory list to determine what travel will affect a person’s coverage. Unfortunately for many, in September Israel was placed on the list with a warning for all travelers to avoid the area, placing it in an insurance gray area.

“Travel to a destination where the U.S. Centers for Disease Control and Prevention has issued an alert or warning or where there is an ongoing armed conflict involving a foreign army is deemed a valid basis for refusing to offer or limiting coverage,” read a 2008 release from the National Association of Insurance Commissioners in response to travel issues. Although there is no active war taking place in Israel, it’s placement on the State Department’s list could be enough for some providers to apply exclusions to coverage in the Jewish State.

Del. Samuel “Sandy” Rosenberg (D-District 41) is confident the listing is temporary and should not result in the hassle it has proven to be for travelers.

In 2005, Rosenberg helped pass legislation forbidding insurance providers in Maryland from “refusing to insure, refusing to continue to insure, limiting the amount or extent or kind of coverage available to an individual or charging an individual a different rate for the same coverage solely for reasons associated with an applicant’s or insured’s past lawful travel experiences.” The law was one of several passed in different states around the country at that time and followed a swath of claims of people being denied coverage or charged excessive premiums because of travel to Israel, including one instance where a Florida congresswoman was denied insurance because of future plans to travel to Israel.

“There is no express prohibition in Maryland law or regulation, however, against an insurer inquiring about, and underwriting based on, future travel plans,” said Vivian Laxton, director of public affairs for the Maryland Insurance Administration, via email. She added that many companies do not underwrite based on future travel, but those who do are still within their legal bounds.

Rosenberg, who co-sponsored the 2005 legislation, believes a new standard for determining what kind of travel is really dangerous should be put in place. He said he plans to introduce a bill to address the problem early this legislative session.

“We got [the 2005 legislation] passed and … we want to build on that,” said Rosenberg. “It makes sense to forbid this kind of discriminatory action by the insurance industry. … It makes as much sense to do it for future travel as for past travel. It’s the same logic, same argument.”


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