Learn Your Life Insurance Options with H1B Visa
Posted in Foreign Nationals last updated on December 11, 2024In this guide, we will outline the life insurance options with H1B visa. We would answer 5 common questions we’ve received and list the important things you need to consider. Here you will learn your options and help you choose the best product.
If at any point you have any questions, are not covered in the guide, or would like us to take a close look into your personal situation, just reach out to us. You can do so by filling out the instant quote form, sending us a message, or simply giving us a call.
Here is what we would cover
- What are the options for someone with an H1B visa
- 5 FAQs about life insurance for visa holders
- Qualifications of life insurance for H1B visa holders
- Important things to consider (do not skip this)
Ok, let’s dive in….
Life insurance options with H1B visa
What are the available life insurance options with H1B? We’ve divided them into 2 major categories, based on duration and features. This is a quick overview.
Let’s look at each option. We will list a brief description and go over the pros and cons.
Term insurance for visa holders
This is a very common type of life insurance. You select the duration of your policy. This is defined as the term of insurance. Typically, a term is 10, 20, or 30 years. The premium is fixed, and it will remain the same for the duration of the policy. We’d like to think of term influence as renting an apartment.
Advantages:
- Cost – this is a major advantage a term insurance offers. It is the most affordable way to secure a life insurance policy.
- In addition, term insurance is a very straightforward product. The terms and conditions are pre-set. You know what will be the duration of the coverage, monthly payment, and death benefit.
- There are life insurance carriers that can offer term insurance to H1B visa holders without a medical exam.
- Living benefits can be available in term insurance, even for non-US citizens and non-permanent residents.
- Here are the Top 3 companies for H1B visa holders as of 2024
Disadvantages:
- The first negative of this product is the fact that the premium guarantee will end in 10, 20, 30 and with one carrier, even 40 years (the longer the duration, the higher the premium). This could leave many families unprotected or faced with an increased cost of insurance.
- The second negative of this product is the lack of any cash value. Many clients feel like they have been paying for insurance for years, and should they outlive the policy, they’ve just wasted their hard-earned money.
Permanent insurance with an option of Return of Premium
Now, many different insurance products are offering permanent coverage. Some are focused on cash value accumulations, while others focus on providing no lapse guarantee (lifetime coverage).
These policies are called Guaranteed Universal Life. Their main objective is to give you the peace of mind that you will not outlive your insurance. There is almost no cash value available in this plan. The key objective is to offer lifelong coverage at a reasonable rate.
Another great feature is that some companies offer a 100% return on premium in years 20 and 25. In other words, you can have the policy for 20 years, pay the monthly premium, and in year 20 decide if you no longer need the insurance, you get your money back. On the other hand, if you still need coverage, you would still be insured.
Advantages
- It offers a lifetime of coverage
- Some companies offer you the option to cash-surrender the policy for a full refund
- Better priced than other permanent policies, such as whole life insurance
- You decide if you would like to keep or cash surrender the policy
Disadvantages
- It is more expensive compared to term insurance
- The premium you would receive back will not be adjusted for inflation and there will not be any interest on the money
Please note, in our opinion, that when it comes to choosing a life insurance option, there is an optimal one. We have worked with thousands of visa holders and have advised them to consider a life insurance strategy. Here is a separate post outlining what we believe to be the best life insurance option with an H1B visa.
5 FAQs on Life Insurance Options with H1B Visa
Here are some of the most common questions we’ve encountered when reviewing life insurance options for H1B visa holders:
Q: Would a policy cover me anywhere in the world?
A: Yes, it would. The biggest thing you need to be mindful of is answering honestly on the application. In other words, if you know you will be moving permanently abroad in the next 2 years, you need to disclose that on your application. For more information, you can review our guide on Life insurance payout if I die abroad. We have also created a comprehensive guide outlining the steps to take if filing a claim for a foreign death.
Q: My beneficiary does not live in the US. Is that OK?
A: Yes, as long as there is a clear insurable interest. We’ve dedicated an entire article to the topic of can a beneficiary lives abroad.
Q: Can I cancel my policy at any time?
A: Yes, you can. Insurance is at-will participation. You can cancel your policy, there will be no penalties or fees. On the other side, the life insurance company can never cancel your policy, as long as you are making your payments.
Q: Is there any fee to apply?
A: No, there is no fee to apply for life insurance. Even if you would have to complete a medical exam, it will be of no cost to you.
Q: Will I pay more as a non-US citizen?
A: This one is tricky. No, companies will not increase the rate only due to citizenship. However, some companies will not approve your application due to your immigration status or may not offer you the best rate available because of your visa. In other words, when it comes time to examining your life insurance options with H1B visa, it is best to work with an agency specializing in life insurance for foreign nationals.
Qualifications of life insurance with an H1B visa
We’ve covered in depth the criteria for coverage and what exactly carriers are looking for when it comes to life insurance with an H1B visa. For more detailed information, simply review our guide on the subject.
In a nutshell, here are the main qualifications:
- You need to be in the US for the application/underwriting process
- Companies would consider what are your financial ties to the US (why policy in the US makes financial sense)
- Country of origin
- Health/Lifestyle – you need to medically qualify for coverage
Again, for a more in-depth analysis, feel free to review our post (we linked to it above).
Important things to consider when applying for coverage as a visa holder
Here are some additional things that every visa holder should consider, when appying for coverage. When we say companies have different requirements for life insurance options with H1B visa, we really mean it.
This is why working with an agency that can advise you of this requirements, will not only give you a changce of a better rate, but it coudl be the difference between getting your appliction approved or decliend.
How Long Have You Been In The US?
Yes, length of stay in the US is a crucial factor when deciding which company can offer the best life insurance option with H1B visa.
The rule is: the longer you have been in the US, the more options for coverage you have:
- 0-10 months—there are no options for term insurance in the US. Companies will postpone your life insurance until you have been here for a minimum of 10 months. There is only one carrier that can consider coverage.
- 12 months—2 years—there are more companies that can offer life insurance protection for someone who is here on a H1B visa. The downside is that many of the carriers will NOT offer their best rate class available if you have not been in the US for at least 3 years.
- 3+ years— if you have been in the US for 3+ years, most life insurance options with H1B visa will be available to you. In addition, some companies can consider your application without the need of a medical exam.
What is Your Country of Origin?
This is also a factor that companies are considering when underwriting your life insurance option.
Let us explain.
Companies have a list categorizing various countries in the worlds. Each country is assiigned a category: A, B, C, D. If you are citizen of A or B country, you are likely to have the most options. However, if you are a citizen of a C or D, you might be very limited, to uneligible for insurance.
Here are the challanges:
- The list is not unified. Every company makes it’s own classification of the counrties.
- The classifications change often and on top of that,
- One counrty can be assined 2 separate classification based on teh different parts of the country.
Does the policy include any additional benefits?
There are many companies on the market today offering life insurance with living benefits included and many of our clients see a huge value in that.
In a nutshell, living benefits allow you to “use” your life insurance while still alive. Should you be diagnosed with a health condition, such as a heart attack, stroke, or invasive cancer, you can file a claim against your death benefit and accelerate a portion of it.
Essentially, you don’t have to die for the policy to payout. Even though hope you never suffer any of these conditions, it is reassuring to know there might be applicable coverage.
Are you able to secure a policy without a medical exam
We understand that many people do not mind completing a medical exam if this will increase their chances of getting approval and possibly lower rates. However, if you can secure the same policy with no medical exam, would it be better?
Many companies are offering accelerating options and we were able to secure life insurance for H1B visa holders without a medical exam.
In conclusion,
When it comes to life insurance options with H1B visa, there are several important things to consider: what are your intentions, what are your needs, and are you looking for additional benefits?
We specialize in life insurance for foreign nationals and will take the time to review your options and answer any questions you might have.
We hope you find this guide helpful and are looking forward to working with you.
Thank you!
