How to Get Life Insurance for Non-US Citizens
Life insurance can be an important tool for protecting your family and loved ones when you die. Depending on the type of life insurance, it can also be an asset in your overall portfolio. But can life insurance purchased in the U.S. help you as a foreign citizen? It’s clear why international health insurance is so vital to people living outside their home country. You may also already know the benefits of international life insurance.
However, there are particular benefits to holding U.S. life insurance as a foreign national. Read on to learn about the benefits and drawbacks, and how to secure life insurance for non-U.S. citizens in the United States.
Do You Have to Be a US Citizen to Buy Life Insurance?
In short, no. Buying life insurance for immigrants can be a bit more challenging, but it’s still doable if you meet all the requirements.
Several foreign nationals choose to live in the United States temporarily or permanently. Which of these you are will affect whether you can secure life insurance, and might make it easier or harder to get it.
Life Insurance for Permanent Residents or Green Card Holders
If you are a permanent resident of the U.S., it means you’ve obtained your so-called “green card” to establish permanent residency. While this status is not equivalent to citizenship, permanent residency offers numerous benefits.
One of these benefits is that most insurance companies will be willing to work with you on life insurance coverage. The main thing to remember is that some companies require at least two years of permanent residency before they will cover you. Check the insurer’s policies carefully if you are in this category.
A note that some green card holders are “conditional residents,” sometimes known as “temporary green card” holders. This green card expires after 2 years and requires additional steps to obtain full permanent residency. Given the two-year rule, many insurance companies require individuals with conditional residency to take an alternative approach when seeking U.S. life insurance.
Can You Buy Life Insurance Without a Green Card?
Yes, with certain restrictions. Life insurance for non-permanent residents is also ever-changing, so it’s essential to research and talk to different companies to see if you qualify.
Foreign nationals can obtain several different types of visas to visit the United States for extended periods. The type of visa you hold will determine whether you can obtain U.S. life insurance. Some of the most common examples of visas are:
- B-2, a visitor visa
- E-2, for investors
- F-1, for academic or language students
- H-1B, a temporary visa for specialized workers
If you are in the United States without a visa, purchasing life insurance will be more difficult. However, it’s not impossible for someone with asylum or refugee status, or even an undocumented immigrant, to buy life insurance in the U.S.
While many companies will not insure someone without a valid visa, and the coverage you can get may be limited, getting term life insurance up to $100,000 is now possible.
The most critical factors in this case are:
- Amount of time in the U.S. – you must be in the country for at least five years
- SSN or ITIN – you must have an identification number that the U.S. recognizes
- Income – you must have some income in the United States
- Country of origin – some countries will not permit you to buy life insurance in the U.S.
Why Get a US Life Insurance Policy as a Foreign National
The most common reasons for a foreign national to purchase life insurance in the U.S. are to cover or reimburse “final expenses” in the event of their death or to ensure their families’ financial security.
Some foreign nationals have built lives in the U.S. with spouses and children. Others take out policies on themselves to protect family members in their home country if they die unexpectedly. Still, others wish to purchase life insurance for their undocumented parents to help carry out their final wishes if they die while in the States.
Other reasons are more directly financial. A foreign national might not be able to get life insurance in their home country. The political and economic situation there may also be less stable than in the U.S., where the U.S. dollar is still one of the world’s leading currencies. Or they might want to protect their assets in the United States.
How Life Insurance Works for Foreigners in the US
Whatever your reason for wanting to secure life insurance in the U.S., you’ll need to decide whether you’re looking for term or whole life insurance. Each of them has different advantages and drawbacks.
Term Life Insurance
Term life insurance is so-called because it lasts a fixed term (usually 10 years). Often, people buy it when they have a lot of expenses, such as a mortgage, and don’t want to leave their families unable to pay if they die suddenly. These policies are less standardized for foreign nationals in the U.S., but they do offer some benefits.
Term life insurance is the most affordable type of life insurance. Its purpose and how it works are also reasonably easy to understand. It lasts only as long as you want it to. And the premiums stay at the same rate for that entire period. All these things could make a term life insurance policy attractive to you as a foreign national in the United States.
Whole Life Insurance
Permanent or whole life insurance is just what it sounds like – a permanent policy that lasts your entire life. Whole life insurance is significantly more expensive. A whole life insurance policy pays out upon your death, just as a term life policy does. However, it also retains a cash value that grows over time, which you can use as a financial instrument.
Whole-life policies also carry several advantages for non-citizens in the United States. Death benefits are exempt from both income and estate taxes. The cash value of these policies is tax-deferred, and any distributions you take from them are tax-advantaged. And as a foreign national, you may enjoy special tax gains if you hold a whole life policy.
Find the Best International Life Insurance
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Requirements for Securing a Life Insurance Policy as a Foreigner in the US
There are two basic requirements if you want to buy U.S. life insurance as a non-U.S. citizen.
First, you must demonstrate that you have strong enough financial ties to the U.S. to make it worthwhile. Perhaps you are running a business based in the States. Or maybe you’re married to a U.S. citizen. You may have ongoing business in the United States, which requires regular trips or extended stays, or you may be studying there on a student visa.
Second, you must be in the United States during the application process. This process includes obtaining a quote, completing the application, undergoing a medical examination (if required), and receiving the policy.
You’ll also need to provide some paperwork to apply, which may include:
- Documentation of your visa or immigration status
- A completed foreign resident questionnaire
- Includes basic questions about your health, work status, and history of your time in and out of the USA
- Personal identification form (ID)
- Forms of ID can include a Social Security Card, ITIN, or a W-8BEN from the IRS (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting)
- Forms to confirm residency in the specific US state where you live
- These can include tax or residency documents
- Not every insurer requires this, depending on the company’s requirements and the state of residency where you apply.
Medical exams are often required and must be performed in the U.S. You will also typically need a US bank account to pay your premiums.
Does a life insurance beneficiary have to be a US citizen?
In short, no. If a life insurance company allows non-US citizens to buy policies, it usually allows the named beneficiary to be a non-citizen. The most crucial factor in naming a beneficiary is that they have what’s called an insurable interest.
Having an insurable interest means that the person would suffer a financial loss if the insured were to die. For example, say you immigrate to the United States to work and send money home to your mother. Your death would cause her financial hardship from the loss of income, as well as your final expenses.
Collecting a life insurance benefit is easier if you are in the United States. However, if your named beneficiary resides outside the U.S., there are options available to make it work. For example, you must have as accurate information as possible about the beneficiary listed in the policy, so the company can locate them and verify their identity. If you believe your beneficiary would not be able to come to the States to collect their benefit in the event of your death, talk to your insurer about how best to protect them and their interest should something happen to you.
Kamela Hutzley is a seasoned writer and editor from New Jersey, now based in Halifax, Nova Scotia. She writes on health, education, travel, and cultural integration, holds an MFA in creative writing from Emerson College, and is a certified somatic therapist with her own practice.
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