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Jewish World: Policy of Denial
Ed Silverman
A few months ago, Jill Collier began searching for a $1 million life insurance policy but ran into a brick wall. One after another, insurers rejected her application. The reason: She candidly admitted she had traveled to Israel recently and expected to do so again in the near future.
Israel, the insurers pointed out, has been on the U.S. State Department�s travel warning list since last October, making it one of 27 countries that Americans are advised to avoid due to violence, instability, crime, or health conditions. Also currently on the regularly updated list are Haiti, Libya, Colombia, Saudi Arabia, Iran, Iraq and Lebanon; people who travel to these lands are also being denied policies, according to insurance industry sources.
"I think it�s entirely discriminatory," says Collier, 52, who works as the U.S. representative for an Israeli medical center. "After 9/11, would insurers not insure people who live or work in New York? I was willing to pay a more expensive premium, but I wouldn�t indulge in deception and not mention the Israel travel. It�s very disheartening. We�re allies."
Collier isn�t alone. Across the U.S., life insurers are increasingly denying policies to anyone who plans to travel to Israel anytime soon. In some cases, policies aren�t being sold even to people who have traveled to Israel in the past two years either. Existing policies are not affected.
Not surprisingly, the rejections are causing a backlash. An estimated 200,000 Americans visited Israel last year and Jewish groups are concerned the issue will not only disrupt ties between American and Israeli Jews, but also curtail travel and commerce, which would further damage an already weak Israeli economy.
"This will have a real chilling effect on tourism to Israel," says Malcolm Hoenlein, executive vice chairman of the Conference of Presidents of Major American Jewish Organizations. "There shouldn�t be redlining of people because they go there."
Although Hoenlein says his group is working behind the scenes to convince insurers to change their minds, he acknowledges that it�s hard to argue with them over the State Department list. Nonetheless, he and others remain livid that insurers are rejecting applications based on past travel. "It�s crazy," says Kenneth Jacobson, associate national director of the Anti-Defamation League. "This will affect a lot of people."
In Washington, D.C., meanwhile, U.S. Rep. Rahm Emanuel, an Illinois Democrat, submitted a bill that would prohibit insurers from denying life policies to anyone based on their past travel. A similar bill recently passed the New York State Assembly and is awaiting passage in the State Senate.
"This behavior is not based on sound insurance practices or actuarial data," says Sheldon Silver, the New York Assembly Speaker who introduced the bill. "I think in some cases, it could be anti-Semitism. In other cases, they�re just following the leader. In any event, they�re all hiding behind the State Department list."
With publicity over the controversy starting to heat up, insurers are on the defensive. But they insist that their actions are entirely justified by the State Department advisory, although the industry says that�s not the only criteria used to deny coverage. Moreover, the industry vigorously denies charges that policy denials are based on anti-Semitism or any form of discrimination.
"We are told that a lot of companies rely on the State Department list. But there�s lots of data the different companies use to make decisions," says Roberta Meyer, senior counsel at the American Council of Life Insurers, an industry trade group that opposes the legislation. "They�re not going to make arbitrary decisions. We look at all kinds of things to get at probability."
She also insists that it�s "fair" to deny coverage based on past travel, because past patterns are used to indicate future behavior. But Meyer couldn�t provide any actuarial data to suggest a greater likelihood that an American citizen has been or would be harmed in Israel than in other countries not on the State Department list.
Not every insurer looks at past travel. Allstate Insurance�s spokeswoman Rebecca Hirsch says the company won�t issue a life policy to anyone who plans to travel to Israel or the other countries on the State Department list. But she says Allstate doesn�t ask about past travel.
Such words aren�t reassuring to Adam Segal, a senior associate at Rabinowitz Media, a Washington, D.C., public relations firm that represents several Jewish organizations. Segal has traveled to Israel twice in the past two years. He and his wife recently had a baby, so he decided it was time to purchase a life insurance policy. He spent four months trying numerous insurers until MetLife agreed to sell him a policy.
"I was completely frustrated," says Segal, 26. "One insurer even asked me to fax pages from my passport. It�s just a knee-jerk response to the State Department list, which itself is a knee-jerk response to Palestinian terrorism. Essentially, this practice rewards terrorist organizations, whose very mission is to disrupt a sense of normalcy in Israel."
Collier, meanwhile, is still trying to obtain a policy. But she realizes she may not find one. "We�re going to have a family conversation and figure out the options," she says. "I don�t want to go without it or give up on going to Israel. But if I have to, I guess I�ll live without life insurance. I have my work. But for others, it�s certainly an unfortunate way of preventing Jews from visiting Israel."
April 5, 2004
Jewish World
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