The world has no borders. People live and work in a number of different countries during their lifetime. We’ve dedicated many articles on the topic of globalization and the ever-changing world of life insurance. Therefore, we felt it is more than appropriate to outline what are the options for life insurance for Americans working abroad. In this article, we will list the qualification process, the types of policies that companies offer and finally what are the steps to secure the best policy for you.
Here is a list of the topics we would cover
- Who needs to read this
- Can you get life insurance if you are working abroad
- What types of policies are available
- Important things to consider when applying for life insurance while living abroad
- What are the steps to take to secure the coverage your family needs
- How to start
Prior to diving into this topic, we wanted to advise you that you can always reach out to us for more information. No two cases are the same, we will take the time to evaluate your circumstances and present you with your options. It is not only our job, it is also our passion to navigate the world of insurance and match you with the right coverage.
Who needs to read this
We felt it was only appropriate to take a minute and answer the question of who needs to read this guide. If you are one of the millions of US citizens (or someone with a US connection) working and living abroad, please continue reading. This guide also pertains to expats or people who have accepted positions to work outside of the US for a period of time.
A question we get often, is why does it matter since I’m a US citizen? In reality, if you spend more than 12 weeks abroad, you are considered non-resident for the purpose of life insurance. In these scenarios, the companies will underwrite your application under their foreign national guidelines, regardless of your US citizenship.
Is there life insurance for Americans working abroad
Let’s get right into it: As an American can I get life insurance if working abroad? The answer is YES, you can.
The key here is working with the right life insurance company. This could make the difference between getting your application approved or not. Every company has its vision of the ideal client. Therefore, they put different weights on various rating factors. You need to focus only on companies that specialize in underwriting global risk and specialize in life insurance for foreign clients.
So, how do you find which company would be the best fit for you? Well, just keep reading…. We will advise you of the steps you need to take to secure coverage.
What types of policies are available
If you are a US citizen or permanent resident, all insurance products are available to you. Please keep in mind that if you are not a US citizen or permanent resident, your only option might be permanent insurance.
If you are new to insurance, please take a minute to review the difference between the two below.
Term life insurance – this is straightforward coverage. The company will provide you with temporary insurance at a reasonable rate. The drawbacks of these options are the short duration and the fact that it does NOT build any cash value. Should you cancel the policy, or the term ends, you could find yourself with no coverage.
Permanent insurance – there are many different permanent insurance products on the market today. Their main objective is to provide lifelong protection, while some also focus on the cash value growth aspect. The downside of permanent insurance is cost. Permanent policies are more expensive than term.
How to select between the two:
Look at your needs. You need to know what you want to accomplish through life insurance. While permanent insurance may provide great benefits, it might not be the best fit for your needs.
Important things to consider when applying for life insurance while living abroad
We felt it is important to outline the steps you need to take in order to secure a policy. We are strong believers that it is easier and less stressful if you know what to expect.
Please keep in mind that due to the nature of your circumstances, it might take a bit longer to secure the life insurance policy.
Let’s cover each one in more depth…
Be clear why you need life insurance – are you looking for personal coverage or business
We put this as the first step since it will determine the type of coverage that is best suited for your needs. In addition, it will help us determine who would be your beneficiary and the policy owner. There are additional things that you need to consider, especially if you are naming a foreign national as a beneficiary on your policy.
Please note, if you are a cross-border key employee and want an organization such as LLC or Trust the policy, there will be an additional set of forms we would need in order to secure the policy.
You need to be in the US for the entire process
We can’t stress this enough. Every company would need you to be in the US in order to start the process. This applies even if you are signing for the policy and application electronically.
Please allow enough time to complete the application and schedule the medical exam. While we try to get ready and obtain all of the required documents at the same time, there might be instances when there will be additional information the companies need.
If you believe that you will have to leave the US and will not be here for 4-8 weeks, you may appoint someone via a limited power of attorney to accept the policy. Please advise us at the beginning, as we need to plan accordingly.
What country do you currently live in
There are countries whose residence we are not able to help. The list is not all-inclusive, as the world situation changes constantly. On top of that, every company has its own set of acceptable countries of residence. In other words, you need to let us review your options for life insurance if you live outside of the US.
Also, this is a good time to mention that we’ve answered the question should a policy payout should you pass away abroad.
Where are your most up to date medical records
This is typically the biggest delay in the process. The companies would need your complete medical history. If you are an American working abroad, you would need to request your records and have them translated into English.
Please note that some companies are able to review medical records in Spanish, without having the need to have them translated.
In many instances, we would ask you to secure the records and we can provide them to the carrier to speed up the application process.
This is another piece of the puzzle. The insurance needs to make financial sense. This stands true regardless if you live in the US or abroad.
In other words, the companies would take a look at your income to determine if the amount of coverage is appropriate and if the beneficiary has sufficient insurable interest.
Insurable interest means that your beneficiary would suffer a financial loss of your passing. Typically, beneficiaries are either spouse, children and/or parents.
What are the steps to take to secure the coverage your family needs
So now you know you know some of the key information companies need when underwriting life insurance for Americans working abroad, let’s take a look at the process:
We will gather the necessary information to determine eligibility. Afterward, we will match you with the right company that can offer you the best rate and easiest approval process, based on your needs.
We try to streamline the process as much as possible. We strive to get all of the required forms signed and schedule the medical exam if one is required.
During this step, the company is reviewing your application and will advise us if they need any additional information. We have a process in place and keep following up with the carrier on a regular basis to stay on top of any requirements.
Once we have the carrier approval, we would reach out to you and communicate their decision with you.
Place in force and policy delivery
This is the final step in securing a life insurance policy. The key to this step is that you need to be in the US for policy delivery and to complete any final signatures or requirements.
As we mentioned above, some companies would allow you to appoint someone via a limited power of attorney to accept the policy. Please make sure you communicate with us your future travel plans, so we can plan accordingly if you will not be in the US.
How to start
We wanted to take a minute and advise you of the importance to work with an agency that specializes in life insurance for foreign affairs. As we mentioned at the beginning of the post, working with the right insurance company would make the difference of having your policy approved or denied. It is imperative to work with the right agency. We’ve contracted with some of the leading carriers on the market, specializing in life insurance for foreign nationals.
Finding life insurance for Americans working abroad is possible. The key is to understand your needs and work with the right carrier for your situation. In addition, you need to be present in the US for the entire process.
We hope you find this helpful. Should you need any additional information or have any questions, feel free to reach out to us.