A number of people living in the US can’t establish residency or obtain a social security number. As an alternative, they register an ITIN (Individual Taxpayer Identification Number). Having an ITIN has numerous advantages and one of them is making life insurance possible for many families.
In this post, we would outline the instances when you can qualify for coverage even without an SSN, we would list carriers’ requirements and touch on the process of applying for life insurance with an ITIN.
If you have any additional questions or would like us to take a closer look into your personal situation, simply reach out to us.
Table of Contents:
Helpful information to consider (Hint: do not miss this step)
Can you get life insurance with an ITIN
Prior to answering this straightforward question, we wanted to touch on WHY a person with an ITIN may want to look into securing life insurance.
There are many reasons why a foreign national may want to look into securing a US life insurance policy. Reasons could vary from the fact that he or she is raising a family in the US and wants to ensure that his or her loved ones are protected from a requirement to secure a business loan.
A US issued life insurance policy holds countless advantages. One of the biggest financial asset/planning tool is the favorable tax treatment that a life insurance policy could receive. Therefore, it is often used by global citizens as a way to transfer wealth.
OK, let’s turn back our attention to the original question:
Can you get life insurance with an ITIN in the US? The answer is: yes, you can! We would touch on a key issue below.
Will every company approve coverage
No, they would not. Therefore, it is imperative to work with a life insurance carrier that is geared towards foreign nationals and would offer you more favorable options.
Let’s put it this way:
Life insurance companies, and all insurance companies in this matter, have their idea of their “ideal client”. They have developed actuaries models and scores to ensure that they offer the best rate for these clients. Unfortunately, if an applicant falls outside of the guidelines, he or she could not only receive a less favorable rating but be declined altogether.
So, what can you do?
Ensure, you are working with a brokerage that can match you with the right company. We would take the time to ask you the right questions and present you with the available options.
What are the requirements to secure coverage with ITIN
It is time to turn our attention to the qualifications and the requirements carriers would have when it comes to underwriting your application.
They would review your country of origin
There are restrictions to sell to residents of certain countries. In addition, there are countries prohibiting selling life insurance to their citizen and/or residents. Lastly, your country of residence could pose an increased risk. Companies review the travel and safety guides posted by the government and adjust these lists on regular basis.
Have financial ties to the US
We’ve covered ties in more debt into other posts. What we want your takeaway to be is that you need to have financial ties to the US:
- Married to a US citizen
- Work for a US company
- Own a property in the US and etc
Companies would not approve of your application unless you have financial reasons to secure a policy. Some carry often refers to it as a Nexus.
US bank account
We understand this may seem simple. However, companies would require initial and future payments to be paid in US dollars. Some would even require you to have the account established 3+ months prior to applying. Having a US bank account could also be viewed as an additional verification tool.
You need to be in the US for the entire process
There are no exceptions here. You need to be in the US to apply, sign any additional forms, and formally accept the policy (the delivery of the policy).
What options for coverage you have are strictly based on your personal situation. There are companies that do not offer any term products to non-US citizens or permanent residents. This could leave with only permanent insurance as coverage.
Again, not every company has these requirements. After discussing your situation, we would be able to advise if you qualify for the term and or permanent insurance and also take the time to point out the differences between both options.
On a side note, we would like you to consider additional benefits a policy may offer.
In some instances, you could qualify for a life policy that offers accelerated benefit riders, also known as living benefits.
Living benefit in life insurance allows you to “use” your life insurance while you are still alive, should you suffer a qualifying medical condition. The money is not considered a loan and you are in control of how exactly is spent.
For more information, you can view our guide on living benefits in life insurance.
Overview of the application process
As we mentioned, you need to be in the US to start and finalize the process. There is no exception to this rule.
Some companies may allow you to submit a limited power of attorney to a trusted individual to accept the policy on your behalf. However, guidelines on this option are changing, and not every company offers it.
After discussing your options and answering any questions you might have, we would help you to submit your application. This could be completed entirely over the phone and e-signed.
During this step, the company may require a medical exam. Based on your circumstances, and the particular situation, an exam may be waived. Keep in mind that companies will review your application and confirm what requirements they may have.
In addition, they may request your medical records. If your records are not located in the US, it may take longer to obtain them. We would advise you if we need you to step in and help us secure your medical history.
After a company reviews your application, it would issue a decision. After we discuss the approval, we would move forward to policy acceptance and delivery. As we mentioned you need to be in the US to accept the policy. We understand we are repeating ourselves, but we do so because we want to emphasize the importance of you being in the US.
Helpful information to consider
We’ve covered many of the key points when securing life insurance with ITIN. However, there are a few additional things you need to consider.
Securing life insurance with ITIN is possible. The key is to work with the right carrier. Feel free to reach out to us if you have any questions or would like us to take a look at your personal situation. We would take the time to review your case and present you with your options.
Hope you find this helpful!