Are you or someone you know born outside of US and looking for life insurance coverage? Have you been turned down for insurance due to your residency? Well, you are not alone. According to the US Census, nearly 13% of the population is foreign-born.
The numbers are increasing and speaking for themselves. Therefore, we felt the need to create a special guide for life insurance for foreign nationals. We want to be the resource for people born outside of the US or living abroad and are inquiring about life insurance.
In this guide, we will go over why a foreign national might need life insurance, the basic requirements, available products, and much more. There is a ton of valuable information to help you find the best solution for you and your family.
What we will cover
If you have a specific question or would like us to go over your personal situation, please reach out to us. You can contact us via phone, e-mail or leave us a comment.
Do I need life insurance
Life insurance is a very powerful financial tool. It has many benefits and the peace of mind that you are doing the best you can to protect what matters to you the most.
The question of why I am considering life insurance should be the very first one you need to ask yourself. However, when it comes to life insurance for foreign nationals, there is another big piece of the puzzle you need to factor in. It is your future plans. In other words, where do you see yourself in the next 5-15 years? Do you envision yourself spending the remainder of your life in the US or you consider returning to your country of origin? We’ve dedicated an entire list of why life insurance for foreign nationals makes sense.
Feel free to over the guide and get a better understanding of your reasons for coverage. This would also ensure that you are matched with the right product and carrier.
In addition, life insurance could be a very powerful tool to help maximize the value of your estate and help preserve your wealth as a foreign national. If this is your objective, we would recommend you take a closer look at a product designed to do just that.
However, when deciding if life insurance is right for you there are several things that you need to consider. Continue reading to learn more.
What life insurance companies are looking for
When approving life insurance for foreign nationals, companies are looking for financial ties to the US. You have to have a reason or need to purchase life insurance in the United States – basically, you need to be able to answer the question: “Why getting life insurance in the US make financial sense?” Are you looking for a policy to cover your final expenses, or you need you want to provide for your family?
Below are some of the most common examples that can fulfill the substantial contact requirement or financial ties requirement:
- Be in the United States for a purpose other than getting life insurance coverage
- Own a real estate property in the U.S.
- Have a systematic ongoing business, requiring visits to the country
- Are married to a U.S. citizen
- Work for a U.S. company in the county
- Study in the U.S as an international student
Does every company have the same rules
No, they don’t. Every company has what we call a “target market or ideal client”. Residency is one of the many components they are considering when reviewing your application. In other words, one company may approve you for the best class available, while others decline your application solely based on your immigration or residency status.
Therefore, it is crucial to work with an agency that specializes in life insurance for foreign nationals.
Requirements when it comes to life insurance foreign nationals
The reality is that not everyone can qualify to purchase life insurance in the US. Besides the health and lifestyle eligibility, a foreign national needs to meet additional criteria. Below is a list of the basic requirements foreign nationals need to meet, prior to securing coverage:
Be present in the United States during the process – there are no exceptions to this rule. An individual needs to be present in the country during the 4 steps of getting life insurance:
- Medical Examination, if applicable
Please keep in mind that a typical underwriting process can take anywhere between 4-8 weeks. You need to plan accordingly.
To sum up:
There are 2 basic requirements for a foreign national to secure life insurance in the U.S.:
- Be in the country during the process
- Have financial ties to the United States.
Available products and coverage amounts
We can’t emphasize enough how unique everyone’s situation is. The majority of the life insurance coverage options that are available to US residents could also be available to foreign nationals and non-US residents.
Term policy – it provides life insurance coverage for a specific duration of the selected term. It can be 10, 20, 30 years. This type of policy offers the highest amount of coverage for the least amount of premium. However, once the term is up, the policy will change into a renewable term and the premiums will skyrocket. Term policies do not build cash value.
Permanent policy – currently, there are different products available that fall into this category. The main characteristic of a permanent policy is that it provides a lifetime of coverage. It also can build cash value. The biggest drawback is that the premiums are more expensive compared to the term products.
Regardless of which option you select, keep in mind that both could be used as a part of an efficient tax planning strategy to minimize your tax exposure as a foreign national.
Final expense policies– while these policies are typically permanent insurance, such as whole life, it has different criteria and options. Therefore, we’ve created separate guides for final expense for foreign nationals and policies without a green card.
It is very common for adult children of foreign nationals to secure a life policy on their parents. Oftentimes, this is a permanent policy designed to cover any final/burial expenses.
There are instances where life insurance companies can offer only permanent policy and term may not be available for you. Please let us review your situation and advise you of your options.
Available policy limits:
Many carriers require a minimum of $250,000 coverage for foreign nationals. Please keep in mind if you apply for coverage higher than $1,000,000, the life insurance company may require additional financial information.
When it comes to underwriting life insurance for foreign nationals, companies would ask about current visa and residency status. Many will determine eligibility based on the type of visa, length of stay in the US, and many other factors. To more easily explain the different alternatives, we’ve broken down the different categories:
Permanent residents and US citizens:
- Living in the US
- Living/working outside of the US
Non-permanent residents (have a visa)
- Living in the US
- Living/working outside of the US
Undocumented (or with expired visa)
Chances are you would fall in one of these categories. We will dive in a bit deeper and outline the available options (read below).
Permanent residents/US citizens living in the US
If you fall into this category, you would be considered a resident for the purpose of insurance and the foreign national guidelines would not apply. You could secure coverage with just about any insurance company.
The thing to pay attention to is that some carriers require you to be a permanent resident or be in the US for a minimum of 2 years. In other words, you might still need to be mindful of the company’s guidelines when applying for life insurance.
Permanent residents/US citizens living outside the US
You would fall into this category if you are a US citizen or permanent resident and you are currently living abroad. We’ve dedicated separate guides, options to secure coverage based on different circumstances.
Non-permanent residents (have a visa) living in the US
When it comes to life insurance for non-permanent residents, there are several factors that companies will consider. The biggest ones are the type of visa you have, length of stay, and what are your intentions. We’ve dedicated several different guides based on visa:
- Life insurance for non-permanent residents
- Life insurance for H1B; we’ve also covered Life insurance options with H1B visa
- Life insurance with O-1 visa
- Life insurance for international students
- Life insurance for a foreign spouse
- Life insurance for Parole in Place
Non-permanent residents (have a visa) living outside the US
There are additional things that you need to establish in order to provide or justify the need of coverage. Companies are looking for financial ties. In other words, if you are not a US citizen or a person who lives in the US, why you need to have a policy in the US. We’ve dedicated an entire guide outlining if you could buy life insurance if you live outside of the US and what every foreign national needs to know about life insurance.
Undocumented (or with expired visa)
First off, we want to advise you that you do have options for life insurance without a green card or if your current immigration status is unclear. The companies would be looking at several factors. Unfortunately, not every company would consider you for coverage. The key points are that you need to be in the US longer than 5 years and have an SSN or an ITIN. For a complete list of requirements, available policies, and cost, you can review our guide on life insurance for undocumented immigrants.
Will a policy covers me anywhere in the world
Life insurance companies would like to know about any future travel plans to foreign countries. International travel affects your life insurance, so please be prepared to provide:
- duration of travel
- the reason (work or pleasure)
- countries you are planning to visit.
Companies will review the information and could possibly deny an application if they believe that there is an additional risk. Some of the things they are looking out for are the risk of terrorism, the possibility of health hazards such as epidemics or famine, and the quality of medical care available. Make sure you disclose travel plans to the company, to ensure that there will be contesting the claim, should you die abroad.
What is a beneficiary and how to select one the right way
A beneficiary is a person that would be receiving the death benefit should you pass away. You can name multiple people on the policy or even an organization. The main thing companies are looking for when underwriting the beneficiary is whether there is a clear insurable interest. In other words, would they suffer financial loss should you pass away?
Keep in Mind,
This is important. You can NOT name someone as a beneficiary, because you “want them to have something”. There needs to be an insurable interest. In fact, we’ve seen it first hand that carriers are declining coverage just because of the lack of insurable interest.
One question we get A LOT is can you name a foreign national as a beneficiary on their US life insurance policy. The staring forward answer is yes, as long as there is that clear insurable interest. However, there are several things that you have to consider, especially, if the beneficiary is living outside of the US.
What documents would a company need
Every situation is unique and we can generalize everything. However, these are some of the most common documents or pieces of information companies would need when underwriting life insurance for foreign nationals:
- Full name, date of birth
- Social security number or ITIN, if you have one. They would use it as a form of identification; We created a separate guide on life insurance with an ITIN.
- A government-issued ID (ID card or a Driver’s license), if you have one
- Copy of your valid passport
- Copy of your visa (permanent residency card) and your A-Number
- W-8 form
- I-94 form
- Any other documents, satisfying your financial ties to the US (property deed, financial statements and etc)
- Medical records, translated in English – companies may request a copy of your medical records. It is on a case by case basis. However, if your records are from abroad, you would need to obtain them and have them translated into English. A good place to mention that some companies would be able to review your records if they are in Spanish, no need for translation.
Payment options for coverage
The premium must be paid in U.S. dollars and drawn on a bank account in the U.S. Some companies require the bank account to be opened for more than 180 days (some companies require 90 days).
All premium payments must comply with applicable OFAC and Anti Money Laundering procedures.
Do I always need a medical exam
This is a common question we get. Unfortunately, when securing life insurance for foreign nationals, the answer is: It depends. There are many companies that will NOT require a medical exam. However, we would need to evaluate your options and can advise you if you have a chance of getting your application accelerated through without the need of a lab exam.
Keep in mind that through technology and more precise data analysis, companies are able to approve more policies for an exam. However, you still need to medically qualify for coverage. Skipping the exam does not mean that you would not have to answer health questions or have the company review your medical record.
How long is the application process
Again, the answer to this question is: it depends. Factors such as what type of policy you are applying for, whether you qualify for a no medical exam, and do you live in the US will determine the length of the application process.
- Typically, if you are applying for a final expense policy (no medical exam, coverage up to $30-50,000) you can have instant approval or have you policy issued within 1-2 days. These types of policies have the fastest turnaround time.
- If you are applying for a traditional coverage (term or permanent), the turnaround time will depend on how fast you can complete the exam (if one is required) and if the company needs your medical records or not. On average, obtaining you medical records is the lengthiest step of the process. On average, you can have your policy issued between 2-8 weeks from start to finish.
What other things matter
Country of residence
This is one of the first things we would like to go over. Due to global economics, government policies and world events, your country of residence matters. There are 2 reasons for it:
- Insurance companies do not offer coverage to permanent full-time residents of certain countries due to current US legal restrictions.
As of June 2017, these countries are: Balkans, Belarus, Burma, Cote d’Ivoire, Cuba, Democratic Republic of Congo, Iran, Iraq, Lebanon, Liberia, Libya, North Korea, Somalia, Sudan, Syria, and Zimbabwe.
- Certain countries do not allow their permanent full-time residents to purchase life insurance outside of the country.
As of June 2017, these countries are: Argentina, the Bahamas, Belgium, the Canary Islands, the Cayman Islands, Costa Rica, the Czech Republic, France, Greece, Hungary, Ireland, Italy, Japan, Malta, Monaco, Netherlands, Panama, Poland, Portugal, Puerto Rico, Saipan, Singapore, South Africa, Spain, St. Barthelemy, St. Kitts & Nevis, Switzerland, Turkey, the U.S. Virgin Islands, United Arab Emirates, Uruguay, and Venezuela
*Please note, that there are now life insurance options for Japanese citizens.
Due to their unique characteristics, China, Mexico, Canada and the Philippines fall into a special category and have different guidelines. You can review the dedicated post we’ve created for the citizens of each country by clicking on the county’s name.
We would like to point out that either of the lists of countries can change at any time. We would do our best to keep it up to date. You can also check the United States State Department’s travel warning list.
Helpful information to consider
* You must be in the US for a purpose other than to purchase insurance.
* Certain occupations are not acceptable. Such as missionaries, politicians, foreign government employees and etc.
* You would be required to submit a copy of your passport, I-94, W-9, and/or visa. If a visa is not available, an explanation is required along with another valid U.S. Government-issued picture I.D
* Copies of financial documents. It’s a good idea to have copies of U.S. bank statements, U.S. property deeds, and U.S. brokerage/investment account statements.
* Medical records from your country of residence may be required. They need to be translated into English. Contact us for more information.
What if I don’t qualify for insurance
If you are not able to meet any of the requirements, we’ve outlined above, we want to advise you that we still have an option for you to consider. There is a solution we found that does not require an SSN/ITIN to apply. In addition, the company would not require you to complete a medical exam or answer any health/lifestyle questions. This product is a guaranteed issue life insurance. We’ve dedicated a separate guide on it, listing cost, policy structure and answered some of the most common questions we’ve encountered.
When it comes to life insurance for foreign nationals, there are additional guidelines and requirements that companies have. Therefore it is essential to work with the right insurance carrier, as not everyone would approve coverage. Evey company would look at you differently based on your immigration status. Some carries are more lenient and have products tailored to life insurance to immigrants, while others don’t. Let us review your personal situation and help you navigate the world of insurance. We specialize in life insurance for foreign nationals.
We hope you find this guide helpful if you have any questions we did not cover, feel free to reach out to us!