A new client recently moved Canada and wants to buy life and health insurance. One problem: He’s from the Middle East.

Clients who come from a country considered dangerous may be deemed higher risk because they’ll likely travel back to visit loved ones, explains David Fox-Revett, senior financial consultant with Investors Group in Newmarket, Ont. This makes them harder to insure.

He refers to these high-risk places as the “stan” countries, such as Afghanistan and Pakistan. But the list changes, depending on social and economic issues.

“We have a young guy in our office from Kazakhstan,” says Fox-Revett. “He’s back and forth all the time and has trouble getting insurance.”

If they’re from parts of Asia or Africa that are prone to disease, they could face hefty premiums. The same goes for people travelling to other countries where terrorism is high, says Fox-Revett.

Exceptions to this undiscussed rule happen when clients travel only for business or short periods, he adds.

And if clients return often, make sure they know what their healthcare will cover.

Yafa Sakkejha, a benefits consultant at The Beneplan Co-operative in Toronto, recalls a case where an immigrant travelled to India to visit family. An accident put him in hospital for a week, costing $20,000. He paid by Visa and assumed provincial and group health insurance would reimburse him. He only got $1,000 back.

“If you have an out-of-country claim, call the 1-800 number on your travel card,” says Sakkejha. “Agents can speak the local language and will enforce international fair-market pricing.”

In this case, the hospital had clearly overcharged him. In hindsight, he joked, “I should’ve known because in my [hometown] I could’ve built a hospital for $20,000.”

Sakkejha warns hospitals in some countries are out to make a profit and “if they get a sense you’re from Canada or a richer country, they’re going to [overcharge] you.”

Clear communication

Still, communication can be a challenge. Insurance, with its technical terms and specific policies and procedures, is tricky to explain to native French and English speakers. Add a language barrier and it becomes even more difficult.

Interpreters can help and are often necessary for older immigrant clients. Kids, if they have them, are usually pressed into the role. The key is to speak clearly and avoid jargon so they know what’s covered.

“It’s very important when I sit down with a client that they really understand what they’re buying and what it will and won’t do,” says Fox-Revett.

Also, learning about medical history isn’t easy. Clients from developing countries can’t always explain what maladies they’ve suffered, because they’ve never been diagnosed. And questions about their parents’ medical histories often come up blank. Fox-Revett says the best an advisor can do is get as much information for the underwriter as possible. Sit with the client and fill out a long-form insurance application, he advises.

Another issue is bureaucracy—the client may not want to deal with Canada’s rule-laden healthcare system. Sakkejha says when she visits family in the Middle East she’s noticed fewer regulations. “Someone may come from somewhere where bribery is normal.”

Sakkejha suggests walking clients through the process, showing them examples of healthcare bills and policies, and explaining that rates are non-negotiable.

Originally published in Advisor's Edge