How Foreign Nationals Use U.S. Life Insurance Policies
- Non-U.S. citizen and non-resident who operates business located n U.S.
- Seeking death benefit protection to provide for children
- Needs to cover estate taxes
- Wants supplemental retirement income
For affluent foreign nationals, there are significant advantages to purchasing U.S. life insurance policies.
These individuals can often readily benefit from the maturity and therefore better rates and often higher quality products characteristic of the U.S. life insurance market.
These life insurance policies are exclusively for international high-net-worth clients who meet the following two criteria:
- Criteria #1: Have no U.S. ties such as property ownership.
- Criteria #2: Have a need for large amount of life insurance, which is not available in his or her country of residence.
There are two more benefits that are appealing to many wealthy foreign nationals. They are:
- The life insurance policies are denominated in U.S. dollars and where distributions are currently exempt from U.S. tax withholdings on gains in the policy.
- When there are concerns about confidentiality.
These life insurance policies are not applicable if the wealthy individual is a U.S. citizen or legal resident with a green card. They’re also inappropriate if the affluent non-U.S. citizen has financial U.S. ties such as real estate holdings, a U.S.-based trust, bank accounts, and equity interests in private businesses.
If you are a non U.S. citizen, foreign national or a non U.S. resident interested in purchasing a U.S. life insurance policy, Top Quote Life Insurance can help you. U.S. life insurance for foreign nationals and non U.S. residents is becoming increasingly popular due to the unique coverage options and very affordable premiums.
Applying for a U.S. life insurance as a foreign national or non U.S. resident is not difficult, but does require working with an agent. The online instant life insurance quote form will not help, as insurance companies will underwrite you based several factors with the biggest being what country you permanently reside in.
When considering the purchase of a U.S. life insurance policy, you will be required to meet underwriting guidelines to determine your eligibility to apply for coverage. The two following guidelines are the most important in determining if we can continue with submitting an application to the life insurance company.
These two requirements must be met prior to submitting any U.S. life insurance application:
- What are your relationship or ties to the U.S.
- The application and exam must be done here in the U.S.
The first and most important eligibility guideline to apply for a U.S. life insurance policy is your relationship to the U.S. In order to be eligible, you must have a qualifying relationship to the U.S. Most foreign nationals and non U.S. residents that we work with qualify as:
- Business owners, corporate executives or high net worth individuals who conduct business in the U.S.
- Owners of U.S. property or U.S. assets that are subject to estate taxes
- Individuals who are here for work for a period of time. These may be educators, engineers, medical professionals, technicians etc.
- Spouse of a U.S. citizen
If you fall within one of these four qualifying relationships with the U.S., we are off to a good start for qualifying for a U.S. life insurance policy.
The second requirement when applying for a U.S. life insurance policy for foreign nationals or non U.S. residents is the life insurance application, medical exam and delivery of the policy all must be completed while you are in the U.S.
Some of the life insurance companies that we work with will allow for you to sign a limited power of attorney (POA). A limited POA will allow us to deliver your life insurance policy to your designated POA who can sign forms on your behalf if you have returned to your country of residency. After we have delivered your policy to your POA, they may mail the policy to you.
In addition to the life insurance application and medical exam that is provided by the insurance company, there are additional underwriting requirements that will be required.
- COVERAGE AMOUNT: Most life insurance companies require a minimum coverage amount of $250,000 when applying for U.S. life insurance as a foreign national or non-resident. The maximum amount of coverage can range from $5,000,000 – $1,000,000,000 depending on the life insurance company.
- FINANCIALS DETAILS: If applying for coverage amounts greater than $1,000,000 the life insurance company will require additional details pertaining to your financials. This is generally required to justify the life insurance amount being applied for.
- FOREIGN TRAVEL: In addition to traveling from your home country to the U.S., the life insurance company will require you to complete a travel questionnaire. Traveling to other countries that are not prohibited by the U.S. can lead to a decline of your request for life insurance.
- MEDICAL RECORDS: Depending on your responses to the medical question on your insurance exam, the life insurance company may need to order medical records from your doctor. If records are required, it can slow the approval process. To avoid any lengthy delays we may require your assistance in contacting your doctor’s office to help speed up the request.
- HOW YOU PAY: S. life insurance companies require that premiums are paid in U.S. currency generally from a U.S. bank account.
Most life insurance coverage options that are available to U.S. residents are also available to foreign nationals and non U.S. residents.
- TERM LIFE INSURANCE:Fixed premium for 10, 15, 20, 25 or 30 years. After the fixed premium length you can elect to reapply for new coverage or continue paying on the current policy, but at a much more expensive rate.
- ROP TERM LIFE INSURANCE:ROP or return of premium term life insurance has all the same feature as regular term insurance but guarantees a full refund of all premiums at the end of the term contract. ROP life insurance generally comes in fixed premium lengths of 20 or 30 years.
- UNIVERSAL LIFE INSURANCE:Fixed premium permanent life insurance. More expensive than term, but will never require you to re-apply as it will last forever.
- WHOLE LIFE INSURANCE:Similar to universal life insurance as it is also permanent insurance with a fixed premium. This life insurance is the most expensive but has the potential to build up cash.
One of the biggest questions we get from our foreign national and non U.S. resident clients is…
“What happens if I pass away outside the U.S.? Will my beneficiary receive the death benefit?”
The answer is yes the life insurance death benefit will be paid to your beneficiary. Life insurance companies that underwrite and approve life insurance for foreign nationals or non U.S. residents do not set restrictions to citizenship or residence regardless of where death occurs. As long as the life insurance coverage is active at the time of death, the death benefit will be paid.
Unfortunately not every county will be eligible for U.S. life insurance coverage. Therefore it is very important that you contact us with your permanent country of residence if considering a U.S. life insurance policy as a foreign national or non U.S. resident.
Unfortunately, there are circumstances in which you may not qualify for a U.S. life insurance policy. Below is a list of common disqualifications for obtaining U.S. life insurance policy foreign nationals and non U.S. residents:
- No qualifying relationship with the U.S.
- No plans to visit the U.S.
- Certain occupations
- Countries that are listed on the United States State Department travel warning list
- A country that is at war
- A country that is at risk of political instability, terrorism or uprising
- A country experiencing a famine, endemic, epidemic or pandemic disease
- A country with non-existent or limited medical care
NOTE: The typical underwriting time for a U.S. life insurance policy can take anywhere from 8-12 weeks depending on the individual applying.