Life Insurance for Foreign Nationals

If you’re a foreign national, you could have access to U.S. life insurance.  Life insurance for foreign nationals can provide access to highly rated U.S. companies, U.S. dollar denominated coverage and a diverse choice of products not found in other countries.  Life insurance planning for foreign nationals could also offer valuable tax advantages that can be used for estate planning, business planning and income replacement to name a few.  Here’s what you need to know about life insurance for foreign nationals.

Foreign Nationals Must have a Connection to the U.S.

Life insurance companies want to ensure that you have a legitimate need for U.S. coverage.  Here are some U.S. connection guidelines.

• You must live in the U.S. for a specific period each year.
• You must have a U.S. financial presence such as a bank account and assets to justify coverage.
• You could also be required to own assets in the U.S. such as a home or business or have immediate family members that reside in the United States.
• You could also justify ties to the U.S. by being employed by a U.S. company.

Your Country of Residence Makes a Big Difference

Availability of life insurance in the U.S. is dependent on the country that you live in for two main reasons.  One, some governments do not allow its citizens to hold life insurance outside of the country.  Two, some U.S. life insurance companies restrict foreign nationals from purchasing life insurance if they live in countries where there is geopolitical instability. Each life insurance company offers a list of foreign national ‘approved’ countries of residence and assigns each a code such as ‘A’, ‘B’ or ‘C’.  Countries that are coded ‘A’ will have fewer restrictions and higher insurance limits.  Countries rated ‘B’ will have more restrictions and lower coverage limits. Countries rated ‘C’ will carry a flat-extra and be looked at with individual consideration.  Some life insurance companies flat out decline coverage in the more politically unstable countries.

Each U.S. life insurance company has its own list, but here are some examples of common countries and their codes.

‘A’ Rated Countries:  Australia, Austria, Bermuda, Canada, Denmark, Germany, Israel, Italy, Norway, Qatar, United Kingdom, and many more.

‘B’ Rated Countries: China, Cost Rica, Kuwait, Malaysia, Mexico, Panama and many more.

‘C’ Rated Countries: Guatemala, Colombia, Bolivia, Russia, South Africa and many more.

Countries where Coverage will be ‘Declined’: Afghanistan, Congo, Egypt, Ethiopia, Haiti, Iran, Iraq, Libya, Pakistan, Syria, Palestine, Sudan and many more.

General Guidelines for Life Insurance for Foreign Nationals

Each life insurance carrier has its own guidelines for underwriting life insurance for foreign nationals.  There are certain rules that must be followed in order to qualify for U.S. life insurance for foreign nationals.  Some basic qualifications include:

• The life insurance policy must be solicited in the United States. Solicitation includes the entire process including: illustration, application, completion of underwriting including examinations and policy delivery.
• Certain occupations are restricted from buying U.S. life insurance such as missionaries, aid workers, politicians, police, foreign military, journalists, government leaders and other high risk occupations.
• Most U.S. life insurance companies limit coverage for health class ratings of ‘Preferred’ to ‘Table 4’. In other words, most companies will not take on high risk clients.
• Premium payments must be made in U.S. dollars only.
• Most U.S. companies limit coverage options to strictly permanent products. Term may be available with certain companies in longer durations.
• In most cases, there are net worth requirements and there are higher coverage minimums compared to U.S. citizens.

Be Patient with the Process

As you can understand, there are many stringent requirements for life insurance for foreign nationals. U.S. life insurance companies view foreign nationals as a greater underwriting risk because the insured is spending most of the time outside of the U.S. and there is limited underwriting information available compared to U.S. applicants.

   Here are some of the requirements you can expect during the application and underwriting process.

• Cover letter from your agent that explains applicant’s situation, case and other details such as applicant’s travel information.
• Proof of identity such as a copy of passports etc.
• Financial supplement and detailed account statements to support justification for life insurance.
• Full paramedical exam.
• Translated doctor records from country of residence. Typically for the last 3-5 years.
• IRS for W-8BEN is required if the foreign national does not have social security number or TIN.

Be patient with the process.  With so many requirements, you must be patient and understand that the entire process will most likely take months to complete.

What You Need to Know About Life Insurance for Foreign Nationals

Life insurance can be a valuable planning tool for foreign nationals. Tax implications will generally depend on whether you are considered a resident or nonresident alien.  It is important to get advice from outside counsel to make this determination.  Remember, the process for life insurance for foreign nationals can take several months, but the benefits are worth it.  You will have access to financially stable U.S. companies that are highly regulated and offer a wide range of products not found in many other countries. If you are a foreign national and in need of life insurance, we can help.  We have access to over 40 of the top life insurance companies in the country.  We can shop your policy to make sure you find the right company to match your case.  Give us a call at 888-687-9444 or email us at info@archstoneinsurance.com.

About Us     

Archstone Insurance Services, LLC is an independent agency that shops over 40 of the top life insurance carriers to provide huge savings on life insurance coverage for our clients.  We are happy to answer any questions you might have about any of the insurance products we offer, your planning needs or your existing coverage.  Feel free to call us directly at (888) 687-9444 or email us at info@archstoneagency.com.