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Life insurance for non U.S. residents and Foreign Nationals
Are you a non U.S. resident or foreign national looking for affordable life insurance coverage from top life insurance companies in the United States?
If you are, then welcome. We are glad you are here! The good news is that non U.S. citizens and foreign nationals can buy a U.S. life insurance policy!
Obtaining life insurance coverage for those originally from another country is easier today than it has ever been. In the following article we will give you a ton of information on what American life insurance companies offering coverage to non U.S. residents are looking for. Our goal is to give you the inside scoop so you know how life insurance underwriters handle non U.S. residents
Life insurance coverage for non U.S. citizens or foreign nationals is within your grasp. Life insurance companies are primarily concerned about one thing—the life expectancy of the country you reside in. If you reside in a country that has a good life expectancy, then chances are you will be eligible for a life insurance policy as a non U.S. citizen.
What exactly is a non U.S. resident?
If you reside outside of the country for greater than 3 months a year or you do not have a full-time permanent U.S. residence then you will be considered a non U.S. resident for life insurance purposes. Citizenship is not a determining factor for insurance companies. Therefore, you do not have to be a U.S. citizen to qualify for life insurance in the United States.
More specifically, a non U.S. resident:
- Is outside of the U.S. more than 3 months a year.
- Visits the U.S. for business or pleasure but whose permanent residence is not in the U.S. An example may be a U.S. citizen, who moved to Hong Kong, China but returns periodically to the U.S. to visit family.
- Expects to reside in the U.S. only temporarily. Some examples may be an individual in the country for business, professional, or educational training or an exchange student in the U.S. for education but plans on returning home upon the end of the school year or upon graduation.
- Resides is the U.S. only part time. An example may be a Taiwan citizen who owns a home in Taiwan and lives in the U.S. for 3 months a year for business purposes. Basically, you do not live in the U.S. but you travel to the U.S.
- It really helps if you have some sort of minimum contacts with the United States such as immediate family, real estate, a business interest, or financial assets such as a brokerage account or bank account.
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What is required for compliance purposes?
The compliance requirements set forth by the U.S. life insurance company are that all aspects of the transaction for getting affordable life insurance for non U.S. residents be completed in the U.S.
- This includes: solicitation,
- the application,
- the medical exam,
- inspection and
- contract delivery.
Since the timeline on most life insurance approvals is around 6–12 weeks, you will want to plan accordingly. Please note: NON RESIDENTS—the general rue of thumb in order to qualify—you have to be in U.S. for at least 90 consecutive days. Therefore, a non U.S. citizen can get a life insurance policy in the United States simply by being present and available in the country.
How long will it take?
The life insurance company will want to see medical records. This can take a great deal of time. Please don’t expect this process to happen overnight. Technology has helped expedite this process dramatically, but it can still take weeks to procure attending physician statements from a physician in another country. Therefore, it is best to plan on the process of obtaining life insurance for non U.S. residents taking at least 8 weeks so that you do not run out of time.
The insurance regulations of some countries prevent their residents from purchasing life insurance outside their country of residence.
This is going to vary by life insurance company, some can be more limiting than others.
Life insurance for Visa holders, Green card holders, and permanent residents
Now, for those of you who either reside in the U.S. on a visa, who are applying for or have a green card, or who live here for more than 3 months out of the year, guidelines among life insurance companies will vary.
Typically, a life insurance company wants to see that you have been in the U.S. with a visa or green card for 6 consecutive months or more. The longer you have been in the U.S. the easier it will be to obtain life insurance for permanent residents with a visa or green card.
The life insurance company will want to know if you plan on staying in the U.S. permanently. You might change your mind down the road or there might be extenuating circumstances out of your control that forces you to leave. But the main point is, the life insurance company wants to know that you intend to stay in the U.S. for the foreseeable future. If that changes down the road after you have life insurance you do not forfeit your life insurance. The company takes the risk that you might eventually leave the country when they approve you for the life insurance.
And finally, the life insurance company has the right to review each client on a case by case basis. Therefore, if someone looks like a beneficial risk, the life insurance company will probably take the risk and approve the client even if the client does not meet all the criteria. Therefore, if you are even considering getting a life insurance policy while in the U.S. as a non U.S. citizen or non U.S. resident, it is worth your time to apply to see if you are eligible even if you do not specifically meet each criterion.
Affluent foreign nationals benefit from U.S. life insurance policies
A foreign national who has ties to the United States could benefit greatly from obtaining life insurance in the United States.
Life insurance for affluent foreign nationals is the easiest way to protect and secure wealth. The death benefit will not be subject to U.S. estate tax, income tax, or transfer tax—especially if you leave the money to your surviving spouse.
Affluent foreign nationals with larger estates may also wish to consider setting up an irrevocable life insurance trust. Typically, if all the requirements of the ILIT are met, the proceeds from the insurance coverage will be free from estate tax. The proceeds can then be used to replace the portion of your taxed estate.
Foreign nationals who are U.S. business owners should also consider setting up a succession plan. One of the best methods is to fund a buy sell agreement with life insurance.
Foreign nationals owning property and/or businesses in the United States should consider funding the ILIT with Indexed Universal Life Insurance. IUL policies provide for more flexibility and often a guaranteed minimum rate of return in the cash account.
It is possible to obtain life insurance in the U.S. if you aren't a resident. There are going to be stipulations for you to qualify. You'll likely need to take a medical exam, so the better your health, the better your rate and death benefit can be. But whether you're a foreign national or in the U.S on a visa or green card, what's important is meeting minimum requirements for how long you're in the country.
Your best bet is to speak with a licensed life insurance agent to discuss your best options and your ability to qualify for life insurance in the United States.