Wealth preservation for foreign nationals

The number of our global clients is rapidly increasing. People take full advantage of what the world has to offer and own properties and other assets across the globe. Therefore, we felt an urgent need to put together a guide outlining why wealth preservation for foreign nationals it’s absolutely necessary, ways and the steps to take. In this guide, we’ve listed some of the key elements of wealth management and assets transfer to the US.

Topics we will cover. Our advice is to go through each one, however, you can click and review the ones that interest you the most.

Before jumping into the topic, we want to stress that we are life insurance advisors. We are not tax professionals and we are not attempting to give you tax advice. Our main focus in this post is to point out your options and advise you why life insurance could be an important wealth preservation tool for foreign nationals.

Please keep in mind that if have a specific question or would like us to take a look at your personal situation, you can simply reach out to us. You can either fill out the quote form on the page, send us a message or simply give us a call. 

Who is a foreign national

We felt it is important to start by identifying who is considered a foreign national for the purpose of life insurance. Throughout this post, we will be referring to someone who falls into the following 3 major categories as a foreign national. As you would see, even US citizens could be considered foreign nationals for the purpose of insurance. 

tokio with test wealth preservation for foreign nationals

US citizens or permanent residents spending more than 12 weeks annually outside of the US

We’ve had many clients surprised that companies would view them as foreign nationals, even if they are US citizens. An example of this category would be expats living abroad. Companies would want to know where you are living, do you have intentions of returning to the US and your reasons for looking into life insurance. Based on the information, not every company could offer you life insurance coverage.

Non-US citizens or permanent residents living inside of the US

People who hold various visa types and live in the US fall into this category. An example would be H1B visa holders, international students, undocumented immigrants and etc. 

Non-US citizens or permanent residents living outside of the US

If you fall into this category,  there is an additional set of requirements you need to meet. We’ve covered them in a special section within the post.

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Why consider wealth preservation

We would get straight into it. If you own assets in the US, you and your family might be exposed to many unplanned expenses. In addition, foreign nationals may not take advantage of many of the exemptions offered to US citizens or permanent residents.

Some of these challenges include taxes, continuous business expenses, limited marital deductions and etc.

We decided to list some of the most common scenarios we run into and demonstrate how life insurance could be an invaluable tool to preserve the individual’s wealth and estate planning.

Example 1:

Married couples with at least one foreign national spouse who have a large estate or a business. 

Circumstances: If the U.S. citizen passes first, there may be U.S. estate taxes due at the first death. Under current law, the unlimited marital deduction will not apply and the non-citizen spouse may be exposed to US estate taxes.

Why life insurance as a solution: Life insurance could be viewed as a liquid asset and can help cover any taxes. It is a strong estate planning tool and could be used together with a special form of trust (QDOT), based on the situation.

Example 2:

Foreign nationals who live outside of the US, but have assets and relatives here.

Circumstances: Foreign nationals may be able to gift a type of asset to their US family members, free of US gift taxation.

Why life insurance as a solution:  It can help you leverage the gift and provide a larger legacy for your family in this country.

Example 3:

Noncitizens who own vacation homes or assets in the US or are planning to move here

Circumstances: Different assets could have a different estate tax status in the US, even different states have a different set of rules when it comes to estate taxes for foreign nationals. Moving in and out of the US could have a financial impact on your assets. 

Again, our primary objective is not to give you tax advice, but simply point out the need for proper planning ahead of time. 

Why life insurance as a solution: Regardless of changes in your future, the regulations in regards to life insurance remain pretty constant. Life insurance benefits could be a stable, liquid asset that could be modified to address future changes in laws or personal situation.

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There are countless scenarios where life insurance could be used as wealth preservation for foreign nationals. The global situation changes rapidly. You might want to retire in your country of origin or move here to the US permanently. In either way, proper planning is essential. Life insurance will provide your family with the funds they need to cover immediate expenses and potential tax obligations.

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Life insurance products to preserve wealth

We’ve covered why foreign nationals need to look into life insurance as a tool to preserve wealth, now it’s time to turn our attention to the ways to do that.

To be honest, this is one of our favorite parts – finding the best option for you. There are several life insurance products that can be used to achieve different objectives. It is essential to communicate your needs with us, so we can take the time to properly plan and match you with the right option for you. We believe that this is the area we shine the most.

Here are the products we can use to maximize your estate.

There are 2 major types of insurance :

Term Life Insurance

Term insurance – a type of insurance that offers temporary protection at the lowest cost possible. These policies are very straight forward. They provide fixed coverage for a fixed period of time at a fixed rate. 

The key here is that term may not be available to all foreign nationals. There are several carriers that can offer term life insurance only to permanent residents or US citizens. 

If you believe that your needs are short term and this product would address them, please reach out to us. We will review your situation and advise you of your options.

Permanent Life Insurance

Permanent insurance – Permanent insurance is available to foreign nationals and US citizens or permanent residents.

We would spend a little more time on this type of life insurance. It is a bit more complex and if structured properly, it could offer more than just a death benefit. We’ve grouped the different types of permanent products based on what you would like to achieve.

Lifelong protection

This simply means that your policy is guaranteed to payout to your family when you pass away. The death benefit and premiums remain level, much like the term insurance. However, they could be set up to last up you reach the age of 121 and build minimal cash value. The most common product like that is GUL (Guaranteed Universal Life). This is probably one of the lowest costs of permanent insurance products on the market.

Other products that can offer lifelong protection are:

Whole life – it is one of the most well-known types of permanent insurance. It builds cash value and guarantees coverage up to age 121. However, it is not very flexible and it is a higher cost.

Extended guaranteed protection

In this category, we qualify a type of insurance that offers not only guaranteed death protection but the ability to build cash value. A product that can be used to achieve it is Indexed Universal Life insurance. We would work closely with you to understand your long term needs to ensure that the policy is set up properly. 

The key advantage of IUL insurance is that it takes advantage of market upturns while preserving the account against downturns. IUL policies have a cap and a floor. Typically the floor is zero. 

This is a good time to mentioned a product specifically designed as a wealth preservation tool: survivorship life insurance. This type of policy is secured on the life of a husband and wife and pays out upon the second death. There are many advantages you need to consider. We’ve created a separate topic on survivorship life insurance for foreign nationals.

Accumulation and distribution

These types of policies are designed to offer a shorter-term death benefit, but the ability to be funded upfront. Typically, this could be achieved with a different type of IUL products. Again, the key here is to understand what you would like to achieve, so you can ensure that your policy is designed to meet your needs. 

As you can see, there is a wide range of insurance products. Each one is designed to address a specific need and your end goal in mind. The very first set of questions we would ask you during our initial conversation is WHY are you looking for coverage. Your reasons and needs determine what is the best type of life insurance policy for you. 

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Find out if you qualify

Find out if you qualify

Here is a shortlist of things companies will look at when reviewing the life insurance application of a foreign national. 

Wealth preservation for foreign national  list of qualifications

Have substantial ties to the US

You need to have a strong connection to the US, often referred to as nexus,  and must provide proof of at least ONE of the following:

  • You own real estate in the U.S.
  • If you own all or the majority of a U.S. business or businesses.
  • You are the owner of an established foreign company actively engaged in business for the past 12 months and travel to the U.S. to transact business.
  • If you are a US resident for federal income tax purposes, under the “substantial presence” test.
  • You are a full-time student at a US university, living full time in the U.S.

Approved country

Due to several reasons ranging from country regulations to the level of danger, residents of not all countries could be considered for coverage. The list is different among the carriers, so please reach out to us to help determine eligibility.

Policy ownership

In other words, who would be the owner of the policy? In most instances, the insured and the owner are the same individuals. However, in some circumstances, it makes sense to have the owner other than the insured.

Here are some of the examples of possible owners on a life insurance policy:

  • –– Insured
  • –– Family member with a US connection
  • –– US business
  • –– Trust in the US
  • –– US limited liability company (LLC) with a US address

Health and lifestyle

In addition to foreign underwriting eligibility, noncitizens, need to qualify based on their health, lifestyle and medical history. 


Process overview

We wanted to touch on the application process since it’s a bit different if you are living in the US and looking for life insurance. The main thing that you need to remember is that the ENTIRE process needs to be completed in the US and it the primary residence where you have ties to the country.

The process includes:

  • Solicitation
  • Application
  • Underwriting
  • Delivery

We’ve been in the insurance world for 15 years and here are the things that we can do to ensure that the process goes as easy as possible. 

We believe in getting all of the forms ahead of time and at one visit. Now, while this may not always be feasible, we know that less back and forth we have, the faster your carriers will process your application.

Here are some of the basic requirements companies have when underwriting life insurance applications for foreign nationals:

Why are you looking for coverage

This is probably one of the first things they will consider. They want to ensure that there is a reason why securing life insurance in the US makes sense. In most cases, we can put a cover letter outlining your unique situation and why life insurance in the US if financially necessary. Companies may require supporting documentation include: bank or brokerage account statements from the US. or abroad, and US property tax bills to verify the need for coverage.

The application needs to be completed in English

Even though companies have translation services, you need to have a basic understanding of the English language and be able to complete the application.

*Some companies may require an additional interview to determine eligibility. If you prefer to have the interview completed in another language, please let us know ahead of time.

Also, if you are not able to answer the medical questions portion of the application in English, the lab company will employ a translator. Please note, you would NOT be able to use a friend or a family member as an interpreter. 

Obtain your medical history

Please note, companies would ask for many details if you have been treated for some conditions. If you are able to provide them with your complete medical history upfront, this will speed up the process tremendously.

life insurance document forlder

Please reach out to us prior to requesting your medical records, as we might need prior approval from the company.

Also, your records need to be translated into English. Typically, life insurance companies have designated companies that they use for translating services and they may even reimburse you up to a certain limit for the cost of translating.

Companies may allow a limited power of attorney for policy acceptance

This could be very beneficial if you are not able to remain in the US for an extended period of time.

Limited power of attorney will authorize someone else other than the policy owner to accept the policy. The Power of Attorney must be notarized. 

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We want to point out that we can’t act as your attorney-in-fact due to conflict of interest.

If you believe that you would want to appoint someone as an attorney-in-fact, please let us know. We need to submit the forms to the company at the time of the application.


In conclusion,

Life insurance is a valuable tool for wealth preservation for foreign nationals. It provides liquid assets to your family and it could be an important part of your estate planning. Please keep in mind, that there are additional requirements you need to complete. We will try to make the process as easy and simple as possible and get this completed all at once.

Hope you find this helpful. Please do not hesitate to reach out to us if you have any additional questions.

Thank you!