Disability insurance is an important consideration for any working-age person who relies on their income and has not yet reached financial independence as it allows you to protect a portion of your income in the event you become too sick or hurt to work.

For foreign nationals working in the U.S. on academic or work visas (like J1, O1, and H1-B), the appropriate disability insurance policy can help provide additional stability beyond income protection as your ability to work and maintain employment may also impact your ability to remain in the United States.

When purchasing disability insurance, it is almost always best to secure the policy that offers the most liberal terms and fewest limitations to help ensure the broadest coverage possible. For those on academic or work visas, it is particularly critical to include the most favorable conditions for claiming benefits if you are required to leave the U.S.

In most states, Guardian’s Provider Choice disability policy is considered the most favorable option for applicants on academic or work visas because you can claim benefits while outside of the U.S., so long as:

• The disabling injury or sickness is incurred while you are in the U.S., or
• The disabling injury or sickness is incurred while you are outside of the U.S. on incidental travel for less than 31 days.

To further support this, two primary factors must be considered:

• Some insurance companies include restrictions and limitations for all applicants, regardless of citizenship, visa status, or your state of residence. Some of the most common wording for these limitations includes:
  • Benefits for disability will be limited to a total of twelve months during the life of the policy, unless you are living in the U.S. for at least six consecutive months in each calendar year.
  • While you reside outside of the U.S., benefits will not be paid for more than a cumulative twelve months during the lifetime of the policy.
     
• Some insurance companies do not include these limitations in their base policy but will specifically add limiting riders for applicants on academic or work visas. Some of the most common wording for these riders includes:
  • The policy will not cover loss for an injury or sickness experienced by the insured while traveling or residing outside of the U.S. This will not apply however, if the insured returns to the U.S. and receives regular medical care from a U.S.-based licensed physician.
  • Monthly benefits will not be provided for more than twelve months in total, during a period of disability while the insured is outside of the U.S.

The result of these outcomes is similar with all the options noted above – A foreign national who becomes disabled and leaves the U.S. would be limited to a twelve-month benefit period.

In most states, (excluding: CA, DE, FL, MT, ND, NY, SC, SD and WY) Guardian’s Provider Choice disability policy falls into the second category listed above – they will not include a broad limitation in their base policy and instead will add an exclusion for applicants who are on academic or work visas. They are unique because the exclusion rider used can be less restrictive. Guardian’s exclusion rider states:

The policy shall not cover loss because of disability contributed to or caused by any sickness or injury incurred while outside of the 50 United States, including treatment, surgery or complications thereof. This does not apply to incidental travel where the policy holder is out of the 50 United States for less than 31 days and has made plans to return.

This is critical for foreign national applicants that plan to live and work in the U.S., with the exception of incidental travel for 31 days or less. Since the exclusion rider would not apply in those circumstances and the base policy itself does not automatically limit the time that can be spent outside of the U.S., benefits can be claimed under the normal terms of the policy without additional limitations.

Selecting which individual disability insurance policy to purchase is not always an easy task. For foreign nationals on academic or work visas who plan to live and work in the U.S., the decision may be a little easier once you understand the advantages of the Guardian's Provider Choice policy in most states.

Additional Details to Note

• Many of the concepts covered in this article are company and state-specific, which means they do not apply to every situation. You should review your situation with a licensed agent before making any decisions.
• Depending on which state you live in, some companies will only limit time spent outside of the United States, its possessions, Canada, and Mexico (or some combination of these). This article references limitations on time spent outside of the U.S. specifically for simplicity, but the US territories, Canada, and Mexico may also be acceptable without limitations.
• Foreign nationals who later secure citizenship or green card status may apply to have the exclusion removed from their policy.
• The material discussed is meant for general information purposes only. The information should be relied upon only when coordinated with individual professional advice.

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