Do Digital Nomads Need Insurance?

by Dan Mattia | December 21, 2018

Digital nomads enjoy a lifestyle that is location-independent and satisfies their wanderlust. After all, it’s hard to resist the allure of spending one day answering emails on the warm sands of a tropical beach and the next fielding phone calls from the Alps.

35% of digital nomads plan to remain location-independent and tend to earn a living as freelancers, independent contractors, and in other self-employed ventures.

They’re not alone, either. A 2017 study by Upwork and Freelancers Union found that almost half of the American workforce will be freelance by 2027.

Location-independent life isn’t without its downsides, though. The lack of a permanent residence or address can complicate something things — like insurance — for digital nomads.

What Kind of Insurance Do Digital Nomads Need?

That depends. If you work remotely for a company that offers benefits, you might be covered by your employer-sponsored group insurance. In other cases, your employer might reimburse your premiums up to a defined limit.

Insuring yourself gets a little more complex if you work or travel internationally, especially for long periods of time.

Digital nomads who work for themselves are responsible for constructing their own benefits package that includes life insurance, health insurance, and travel insurance.

Life Insurance for Digital Nomads

As a digital nomad, it’s equally important to plan for your life the same way you do your travels. During that planning, you should consider what might happen should your life’s journey come to an end.

Life insurance should be part of that planning, no matter what stage of life – and locale – you’re enjoying.

Digital nomads can plan for the policy’s death benefit to be used for final expenses, paying off remaining debt, leaving money behind for children, or for something else.

But there are some unique reasons digital nomads should have life insurance, too.

In the U.S., the average traditional funeral costs $8,755. A digital nomad who passes away outside the U.S. must have their body repatriated – a process which costs between $10,000 and $20,000 or more (or $1,200 to $2,000 if cremated) on top of funeral costs.

For digital nomads, life insurance can return your body home so loved ones have one final opportunity to say goodbye. For the surviving next-of-kin, they can be supported by the proceeds of a life insurance policy.

Health and Travel Insurance for Digital Nomads

Digital nomads need to maintain their health and bodies, no matter where they are in the world. To that end, digital nomads need health insurance that covers routine care and medical emergencies.

Some digital nomads will maintain health insurance in their “home” country or wherever they are considered to have permanent residency. This health insurance is then supplemented with travel insurance, which covers any emergency illnesses or injuries sustained while abroad.

With this setup, nomads must return home for routine and preventative care, like a checkup. Emergencies and unexpected medical visits while abroad would be covered by either a regular health insurance plan (depending on the plan) or travel insurance.

If a digital nomad doesn’t have or want to have health insurance, travel insurance will cover emergency visits, as well as other events, like theft or cancelled flights. The nomad would then have to directly pay for routine checkups – something that isn’t necessarily an issue in countries where out-of-pocket medical costs are as low as a cell phone bill. Still, travel insurance doesn’t tend to cover pre-existing conditions or long-term illnesses, like cancer.

Digital nomads and expats who become citizens of their host countries may be eligible for local healthcare coverage.

Those digital nomads who want a more comprehensive health insurance option are left with global or expat health insurance. Global health insurance is designed for people like digital nomads and others who travel extensively and for long periods of time. It’s essentially a regular, typical health insurance plan for those without a regular, typical lifestyle.

Can Digital Nomads Get Insurance Without a Home Address?

It’s challenging for digital nomads to get insurance without a permanent residence and address. But not impossible.

Sa El, co-founder of Simply Insurance* has seen digital nomads do one of two things:

  1. Have a home in the U.S.
  2. Use a relative’s address.

Nomads with a home or permanent residency in the U.S. shouldn’t have much of an issue applying for insurance “outside of completing an exam,” says El. In his experience, these nomads simply return home to complete the exam – if there’s even an exam at all.

Some insurers will allow digital nomads to use a relative’s address on an insurance application. Others won’t. El advises nomads to “reach out to the companies and ask them this question.” If a specific insurance company allows you to use a relative’s address, there might be an increase in the monthly premium if the underwriter determines you travel too often or too much within a given period of time.

El cautions against nomads lying on their insurance applications. “The worst thing you can do is not mention your current living situation because most insurance companies have [a] two-year contestability clause that allows them to research your death. If they find that you didn’t disclose everything they can deny coverage.”

Does Traveling Internationally Make You Ineligible For Coverage?

Unlike car or home insurance, life insurance premiums aren’t affected by your zip code. Instead, you’ll likely be required to divulge your travel habits during the underwriting process. In most cases, international travel won’t impact your premium unless you’re traveling to countries that are deemed “high risk.”

Sa El recommends honesty when applying for life insurance as a digital nomad. “If you are an expat or digital nomad, purchase your insurance while you are living in the U.S. or are at home. Don’t try to purchase insurance when you are outside of the country, to [reduce] any underwriting issues, and be honest about both your current living situation and your traveling habits.”

If you are a U.S. citizen and have a permanent residence, “feel free to apply for coverage at any time.”

Once a digital nomad is covered by life insurance, “insurance companies can’t do anything about you moving out of the country,” says El. As long as you were honest on your application and are not the victim of an event not covered by your policy (such as war), you’re covered.

When it comes to managing healthcare, digital nomads are dependent on the type of health insurance they’re covered by. With an existing policy, like group health, nomads may need to return home for routine visits or preventative care. Travel insurance would be relied upon to cover emergencies.

Those without existing health coverage would be more comprehensively covered by global or expat health insurance. Global health insurance is meant for the dedicated digital nomad who either has no permanent address or who doesn’t return home frequently.

Put Together Your Own Digital Nomad Insurance Package

The lifestyle of a digital nomad is unique and untethered to any one location, but shouldn’t be left unprotected. Shop around for health insurance that covers you no matter where your wanderlust takes you. Then, buy a life insurance policy that will protect the nomadic lifestyle of your loved ones – or aids you on one final journey back home.

*Disclaimer: Simply Insurance is a licensed agency and receives advertising revenue from Bestow.